Syrah Resources Achieves $53 Million Loan Waiver Amid Mozambique Protests
Syrah Resources has obtained a $53 million loan waiver from the U.S. DFC following protests that affected access to its Balama mine. The company has not defaulted on its loans and aims to access additional funding once production resumes, which has been halted since July due to oversupply and low demand.
Syrah Resources, an Australian graphite producer, recently secured a $53 million loan waiver from the U.S. International Development Finance Corporation (DFC) amid challenging conditions at its Balama mine in Mozambique. This waiver comes after the firm declared a force majeure on December 12 due to access restrictions following protests. Importantly, Syrah has not defaulted on its $150 million DFC loan or the $102 million loan from the U.S. Department of Energy.
The DFC’s waiver pertains to the initial tranche of Syrah’s loan, aimed at ensuring sufficient working capital for Balama operations. While operational staff have left the site amid ongoing unrest, security personnel remain to safeguard the mine. Syrah anticipates that it can access the remainder of its DFC funding once graphite production resumes, although it has not yet set a restart date.
Graphite production at Balama ceased in July, primarily due to an oversupply of inventory and diminished demand for graphite fines. In the second quarter of this year, the mine produced 24,000 tons of graphite, with subsequent efforts focused on managing existing stock. Plans were originally in place to recommence production between September and December 2024.
Protests at the Balama site escalated following Mozambique’s October elections, during which the Supreme Court upheld results favoring the ruling Frelimo party. These protests have significantly disrupted operating conditions in Mozambique, compelling Syrah to navigate a complex and challenging environment as they seek to stabilize their operations at Balama.
Syrah Resources is a prominent Australian graphite producer known for its Balama mine located in Mozambique. The company has faced various operational challenges, particularly related to civil unrest and protests that have affected access to the mine. The loans from the International Development Finance Corporation and the U.S. Department of Energy are critical for maintaining operations and ensuring financial stability amidst these challenges. Understanding the sociopolitical landscape in Mozambique, particularly after the 2024 elections, is essential to grasp the intricacies affecting Syrah’s production capacity and strategic decisions.
In summary, Syrah Resources has successfully secured a $53 million waiver from the DFC to navigate operational challenges at its Balama mine in Mozambique. While the firm has not defaulted on its loans, disruptions caused by protests and changes in the political landscape have led to a halt in production. The ability to resume operations will be contingent upon improved conditions and the stabilizing of the region’s unrest.
Original Source: www.argusmedia.com
