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AustralianSuper-backed Syrah Resources has secured breathing space from US government lenders

There are fears protests in Mozambique which have halted production at AusSuper-backed Syrah’s graphite mine could escalate this week.

Violence linked to a dispute over the results of the recent election has caused chaos in Mozambique and claimed hundreds of lives. Picture: Amilton Neves/AFP
Violence linked to a dispute over the results of the recent election has caused chaos in Mozambique and claimed hundreds of lives. Picture: Amilton Neves/AFP

AustralianSuper-backed Syrah Resources has secured some breathing space from US government lenders as its graphite mining operations remain out of action amid protests in Mozambique now entering their fourth month.

Syrah declared force majeure on graphite production in December and disclosed it was in default on loans, with the US International Development Finance Corporation (DFC) and US Department of Energy (DoE).

The company said on Tuesday it reached a conditional waiver agreement with the DFC around defaults on a $US150m ($239m) loan.

It remains in talks with the DoE about its $US102m loan facility, but indications are the US agencies intend to hang tough with Syrah as part of efforts to support non-China graphite supply chains.

Syrah is promoted as the only vertically integrated natural graphite active anode material supplier outside of China.

The company started downstream processing in the US in 2024 at a factory partly funded by US taxpayers and has an offtake deal with Elon Musk’s Tesla.

AusSuper has supported Syrah through multiple equity raisings and now owns almost 33 per cent of the stock.

Mozambique’s opposition presidential candidate Venancio Mondlane attends a vigil being held following the killings of his advisor and lawyer. Mondlane, who has been heading more than two months of deadly protests against disputed election results from outside the country announced he would return next week ahead of the inauguration of the new president. Picture: Alfredo Zuniga/AFP
Mozambique’s opposition presidential candidate Venancio Mondlane attends a vigil being held following the killings of his advisor and lawyer. Mondlane, who has been heading more than two months of deadly protests against disputed election results from outside the country announced he would return next week ahead of the inauguration of the new president. Picture: Alfredo Zuniga/AFP

Mozambique has been torn apart by protests over the disputed results of the October election in which the ruling Frelimo party, led by Daniel Chapo, maintained its grip on power.

Mr Chapo is due to be sworn in as president next week.

There are fears the protests, which have claimed dozens of lives, could escalate, with opposition leader Venancio Mondlane due to return to the southeast African nation.

Syrah locked in the $US150m loan with DFC in October and received an initial $US53m disbursement in November 2024.

The funds are available to fund working capital at Balama, but Syrah cannot access the balance while the operations remain blocked by the protests.

“The interruption to operations at Balama is being monitored by all parties and Syrah is continuing to work collaboratively with DFC and DoE regarding these events of default,” Syrah told investors.

“While events of default have been triggered, Syrah has not defaulted on any payment obligations under the loans.”

The $US102m DoE loan is fully drawn down and Syrah started making quarterly repayments last year while in talks with the DoE about an additional $US350m in funding for a big expansion of its active anode material plant in Louisiana.

Syrah couldn’t carry out the mining needed in the December quarter for customer sales and to replenish inventory as the situation deteriorated. Syrah said protests at Balama continued to interrupt operations and restrict access to the site, which is being protected by security officers.

“There have been no reports of damage to property, plant, or equipment,” a company spokesman said. “We are focusing on working with the Mozambique authorities to enable a safe and effective return to operations at Balama, noting the ongoing broader challenges in Mozambique.”

Originally published as AustralianSuper-backed Syrah Resources has secured breathing space from US government lenders

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Original URL: https://www.adelaidenow.com.au/business/australiansuperbacked-syrah-resources-has-secured-breathing-space-from-us-government-lenders/news-story/f5138c71882613eb83d4bb2975b209b2