Syrah Resources Mozambique mine to supply graphite destined for Tesla factories

Elon Musk, CEO, Tesla

A MINE in Mozambique will supply graphite for processing that will eventually end up in batteries manufactured by carmaker Tesla, said the LA Times.

The mine – Balaama – is operated by Syrah Resources, an Australian firm that supplies about 10,000 tons of graphite from its plant in the US.

In terms of the contract with Tesla, which is conditional, Syrah will supply 8,000 tons of graphite which is critical for production of lithium-ion battery production.

According to the newspaper the supply contract is important for Tesla as it seeks a way of reducing its dependence on input materials from China.

The mine is located in Mozambique’s Cabo Delgado Province where jihadist militants last year went on the rampage. The mine has a two million ton a year plant capacity producing up to 350,000 tons annually of graphite concentrate.

Balaama also has potential to produce a vanadium by-product. Syrah Resources is conducting a prefeasibility study regarding the possibility of producing a saleable vanadium product from the mine.

The deal with Syrah is part of a broader effort by automakers to secure relatively scarce raw materials for batteries as demand for electric vehicles is expected to grow, Sam Abuelsamid, principal e-mobility analyst for Guidehouse Insights, to the LA Times.

The deal also brings the graphite processed in Louisiana much closer to Tesla’s US factories.

“The pandemic pointed out to us that we’ve got these long, long, long supply chains, and it doesn’t take much to disrupt a supply chain,” said Donald Sadoway, a professor of materials chemistry at MIT. “Somebody could all of the sudden say, ‘We’re going to jack up the prices,’ or ‘We’re going to refuse to ship it.'”