Tesla has signed an agreement to acquire about 80% of the output from Syrah’s processing plant in Vidalia, Louisiana, starting in 2025. As per a report from The Associated Press, Syrah’s Louisiana plant sources its graphite from the company’s Balama, Mozambique mine.
The value of the deal has not been shared to date. While the agreement has been signed, the Australian miner would still be required to ensure that the graphite from its Mozambique mine meets Tesla’s standards.
A recently shared report has indicated that Tesla is looking to source some key battery materials such as graphite from locations outside China. Among these is reportedly one of the world’s largest graphite mines in Balama, Mozambique, which is operated by Australia’s Syrah Resources.
Simon Moores, the CEO of Benchmark Mineral Intelligence, added that Tesla’s decision to partner up with an Australian supplier for its graphite needs could reduce the company’s reliance on China, which dominates the worldwide graphite segment. “It starts at the top with geopolitics. The US wants to build enough capacity domestically to be able to build lithium-ion batteries within the USA. And this deal will permit Tesla to source graphite independent from China,” Moores said.
The Benchmark CEO noted that Tesla’s utilization of graphite from Syrah’s Mozambique mine could also help the company avoid some sensitive issues, as environmental concerns have been brought up about some of China’s mines. That being said, Moore also noted that the deal is just as important for the Australian mining company, as Tesla is a major client for its graphite business.
Battery supply is a key issue that Tesla has been working on for years. Amidst the market’s shift to sustainable transportation, the demand for batteries has steadily grown. This has resulted in Tesla expanding its list of battery suppliers for facilities like Giga Shanghai while developing its battery production capabilities in the United States. So far, Tesla is hard at work ramping and refining the production of 4680 cells at its Kato Road facility, which has a capacity of 10 GWh when fully operational.