Syrah Resources has obtained a $53 million loan waiver from the DFC after declaring force majeure at its Balama mine in Mozambique, triggered by protests that limited access. The firm has paused production due to sufficient inventory and low demand, with operational staff evacuated, although security remains. The DFC waiver is meant to support working capital, allowing for access to additional funds once production resumes, but no restart date has been set.
Syrah Resources, an Australian graphite producer, has successfully secured a loan waiver amounting to $53 million from the U.S. International Development Finance Corporation (DFC). This financial relief comes amidst recent defaults related to its U.S. government loans tied to the Balama graphite mine in Mozambique. On December 12, the company declared a force majeure at the mine due to limited access caused by protests. Although production has ceased since July owing to inventory management and low demand, the DFC waiver is designated to support working capital at the facility during this operational hiatus. Syrah has clarified that it remains compliant with repayment obligations on both the DFC loan and a separate $102 million U.S. Department of Energy loan as of January 7.
The DFC’s waiver affects only the initial tranche of Syrah’s financing and allows for further disbursements upon resumption of production at Balama, though a restart date has yet to be announced. The company managed to produce 24,000 tons of graphite in the previous quarter but required time to deplete existing stock due to low market demand. Protests originating in September escalated after the Mozambican Supreme Court endorsed the results of the October general elections, which reaffirmed the ruling Frelimo party. This has exacerbated operational difficulties at Balama as Syrah continues to monitor the evolving situation.
Syrah Resources operates the Balama graphite mine in Mozambique, a site critical for producing graphite, a key component in battery technology and electric vehicles. The mine experienced significant disruptions due to local protests, which have complicated operational activities. The company’s strategic decisions, including the declaration of force majeure, stem from balancing production with market conditions and local socio-political challenges. Understanding the dynamics at play in Mozambique is essential to evaluating Syrah’s operational and financial strategies.
In conclusion, Syrah Resources navigates a period of financial and operational uncertainty following recent protests affecting the Balama mine. The newly acquired loan waiver from the DFC addresses immediate capital needs amid challenging market conditions. While the company remains committed to its financial obligations, the exact timeline for a return to production is uncertain, hinged on resolving local unrest and stabilizing operations at the mine.
Original Source: www.argusmedia.com
