(Ecofin Agency) - In September 2023, the United States announced a $150 million loan to Australia’s Syrah Resources, which operates Africa's largest graphite mine in Mozambique. The loan was contingent on meeting certain conditions, which have now been fulfilled.

Syrah Resources confirmed yesterday, Oct.30, a $150 million binding loan agreement with the U.S.-based Development Finance Corporation (DFC). The funds will be used to develop the Balama graphite mine, the largest in Africa. 

Set to mature in May 2037, the loan will be disbursed in several installments, with the first $73 million scheduled for November 2024. This money will help expand the mine's tailings storage facility and cover normal operating costs.

“This is a highly significant transaction that will support more diverse, resilient, and sustainable critical mineral supply chains and bolster investment in Africa,” said Danielle Montgomery, DFC's Acting Vice President for Infrastructure. 

The $150 million loan announced in 2023 is part of the U.S. strategy to reduce reliance on China for critical minerals. Currently, China produces 90% of the world's battery-grade refined graphite. Syrah Resources and its Balama mine supply natural graphite, which is processed in Louisiana to support Tesla's electric vehicle batteries.

The loan comes as Syrah has paused graphite production at Balama due to a surplus in the global market. In its Q3 2024 report, the Australian company reported sales of 11,800 tonnes of graphite, down from 23,200 tonnes in the same quarter of 2023. According to Syrah CEO Shaun Verner, the funding will help the company maintain its operational strategy of suspending production at Balama while being able to quickly ramp up when market conditions improve.

Emiliano Tossou