Last week the firm fell out of the ASX 200.

Half-year financials today show the company lost $38.6 million after tax for the first half of 2023, booking a $12.44 million loss on its operations in Mozambique at the Balama mine.

Compare that to a $9.081 million profit on its operations last year.

“During operating campaigns undertaken in the interim financial period, Balama production was constrained by finished product inventory positions and lower Chinese demand,” Syrah noted in its half-year report.

“Continuing volatile Chinese anode market conditions and excess availability of finished product inventory led to lower demand for natural graphite from Balama and a decision to pause Balama plant operations, resulting in no production in May and June 2023.

“This decision was made to allow for downstream inventory consumption to occur and natural graphite demand conditions to improve.”

Balama’s production fell from 89,800 tonnes in the 2022 half-year to 56,300t in 2023, with shipments to third parties dropping from 79,300t to 44,700t. Around 2200t were sent to the Vidalia plant in Louisiana.

Shot in the arm

But it has received a shot in the arm today as well, sending its shares around 8% higher. That has come in the form of a US$150 million ($233 million on Monday) loan commitment from the US International Development Finance Corporation the company says can be used to fund capital requirements at the Balama mine.

The main game for Syrah is to move downstream and become one of America’s only producers of active anode materials for batteries at the aforementioned 11,250tpa Vidalia factory. A definitive feasibility study (DFS) is currently being conducted on plans to expand the facility to 45,000tpa.

Believed to be the first DFC loan for a graphite mine, it demonstrates the central position of upstream resources to the downstream picture as the US under President Joe Biden looks to solidify an ex-China supply chain for battery materials.

“The DFC board’s approval of the DFC loan to Twigg (a Syrah subsidiary) demonstrates the importance of Balama, which is the largest integrated graphite mining and processing operation globally, to the critical minerals strategy of the US,” managing director Shaun Verner said.

“Together with the US Department of Energy loan for the expansion of Syrah’s downstream business, DFC loan funding will position Syrah as a strategic partner in bolstering supply chain security for critical minerals required for the electric vehicle and energy transition in the US.”

The DoE issued a binding loan facility of US$102 million ($146 million at the time) back in mid-2022 to support the expansion of Vidalia to its commercial scale 11.25ktpa capacity.

As of June 30, $65 million had been advanced.

Due to robust supply in China and temperate EV sales growth in the Middle Kingdom, graphite prices have staggered in 2023 so far. According to Benchmark Mineral Intelligence, high purity -100 mesh 94-95% flake graphite for batteries was down 6.9% on the month in August and 28.9% YTD to US$578/t.

The government expects to earn over $3.6 million (8.4 billion/-) annually once the envisaged graphite mine at Mahenge in Ulanga District, Morogoro Region, starts operations.

Adolph Ndunguru, the Minerals permanent secretary, made this observation at a progress meeting with stakeholders of the Mahenge mining project, grouping the Minerals ministry, the mining commission, the Treasury Registrar’s office, the revenue authority (TRA), TANESCO, the Tanzania-Zambia Railway, TanRoads and the Tanzania Ports Authority.

The amount is based on 51% of the surplus from the investment whose total benefit to the national economy is projected at $8 billion over a period of 26 years.

The project results from an agreement with Black Rock Mining Ltd., Mahenge Resources Ltd. (T) and Mahenge Resources Ltd (UK) inked last December 13, to jointly develop the graphite mine.

Under the framework agreement, the parties agreed to establish a joint venture company for the mining activity, setting up Faru Graphite Corporation, at a ceremony attended by President Samia Suluhu Hassan, where the minister, Dr Doto Biteko signed for the government.

The government has a 16% free carried interest, a stake for which it deposits no capital, and the investor, Black Rock Mining, retains 84% shares in the joint venture, Faru Graphite Corp.

Two months ago Faru Graphite Corp. was handed the mining license, enabling the project to enter the development stage, envisaging that at full operation the project will create over 1,000 direct job opportunities.

The project is timely as it has the potential to maximise graphite exploitation advantages in the global market where graphite is used in renewable energy technologies, such as solar panels.

An online entry says graphite is resistant to extreme heat, “so it is perfect for the crucibles and moulds used to cast the silicon in solar panels, and works as a heat shield and thermal insulator.”

The meeting sought to bring the relevant stakeholders to the same operating framework to ensure alignment on the conduct of various aspects of the project in the national interest, the ministerial executive noted.

Alimiya Osman, the Faru Graphite CEO, said that when the project kicks off, the government is projected to earn up to 800m/- a day through its 16% stake.

John Vries, the Graphite Mining executive chairman, said that the framework agreement enables the government to secure project benefits through a combination of dividends, taxes and duties.

The company’s commitment involves the purchase of goods and services, supply of electricity, rail haulage work and extensive use of port services, he said.

Key facilities and infrastructure to be set up for the project include rail transport from Ifakara to the port of Dar es Salaam via the Tanzania-Zambia railway.

Other facilities are access to land at Ifakara for a railway siding to Tazara line, power supply to the mining site, along with suitable tarmac road from Ifakara to the mining site, he said. Confirmation of the tax framework will be sought during the construction of the mine as set out in the framework agreement, along with the resettlement and compensation exercise, he added.

Diversified battery anode materials company EcoGraf Ltd. has announced it has signed a non-binding Memorandum of Understanding to partner with Vermeer Equipment Suppliers to explore low emission mining methods at the Epanko Graphite Project in Tanzania. Vermeer Equipment Suppliers (Pty) Ltd., is the sub-Saharan African distributor of Vermeer Manufacturing Company established in the USA in 1948, with a team of over 4,000 personnel globally. Vermeer is a manufacturer of high-quality underground construction, surface mining, agricultural and environmental equipment.

EcoGraf is building a diversified battery anode material business to produce high purity graphite products for the lithium-ion battery and advanced manufacturing markets. Over US$30 million has been invested to date to create two highly attractive, development ready graphite businesses.

Vermeer and EcoGraf have agreed to evaluate the suitability of a new and alternative surface mining concept with one of Vermeer’s surface miners to economically mine, load and haul Epanko ore, with a resulting lower environmental impact and carbon footprint than conventional mining processes. Initial environmental and cost benefits of the continuous miner are expected to include:

• Increased slope stability and slope angles resulting in smaller mine footprints, thereby reducing the volume of waste and surface area impacts;
• Eliminating drilling and blasting;
• Reduced haul truck emissions through increased payload; and
• A reduction in mining equipment and the requirement for primary crushing.

Under exclusivity arrangements, EcoGraf will provide Epanko’s extensive geotechnical, geological, structural and mining data to Vermeer to undertake an initial study to provide technical and economic data relating to surface miner performance. If the results of that study are sufficiently encouraging, EcoGraf and Vermeer will together formulate a practical onsite test.

The agreement with Vemeer is part of EcoGraf’s enhancement studies underway for Epanko, following the encouraging steps being taken by the Government of Tanzania to attract increased foreign investment and positive progress in relation to the debt financing arrangements for the construction of new Epanko Graphite Mine.

The company also expects to finalise its review of the large ‘fresh rock’ graphite zone within the Epanko Mineral Resource to define the potential to deliver a high purity 99% carbon graphite, without additional processing. The extensive metallurgical testwork undertaken as part of the Independent Engineer’s Review for debt financing indicates that this material will provide an excellent long-term feedstock to the EcoGraf HFfree Battery Anode Material Facilities and is expected to lead to a reduction in purification reagent consumption rates and production costs.

EcoGraf said it is “enhancing Epanko’s sector leading ESG Credentials and leveraging off the bankable feasibility study, social and environmental planning programs that have been conducted in compliance with the Equator Principles, a globally recognised risk management framework adopted by leading financial institutions for assessing and managing social and environmental risks in new developments. The Epanko development will provide inter-generational economic and social benefits for the regional community near Mahenge in Tanzania and will support Tanzania’s positive industrialisation progress.”

In recent weeks EcoGraf’s in-country project development company TanzGraphite (TZ) Ltd. has held a series of meetings across all levels of Government in Tanzania to discuss arrangements for the development of the Epanko Graphite Project. Epanko was showcased during 4th International Minerals and Mining Investment Conference held February 22-23 in Dar es Salaam. At the event TanzGraphite was honoured to be recognised as ‘first runner’ at the conference, with the award in recognition of the interest generated by the Epanko Graphite Project and TanzGraphite’s support for the government’s efforts to promote Tanzania’s minerals sector. EcoGraf is looking forward to working with the Vermeer team and providing the results of the initial study.

Northern Graphite Corp. is pleased to announce a number of new management appointments which are part of an ongoing process designed to strengthen the Company’s management team. These new additions will help guide Northern through the transition to an operating and producing company on closing of the previously announced acquisition of two graphite mines from Imerys SA. Northern is set to become the only North American and third largest graphite producer outside of China at a time when graphite demand is forecast to rise significantly due to growing EV demand.

David Marsh, B.Sc., Chief Operating Officer

Dave has 40 years of combined experience managing the process engineering divisions of leading international consulting companies and working in industry where he has led companies in taking their mining projects from the scoping level through to feasibility, construction and operations. Dave was previously Chief Operating Officer of Avalon Advanced Materials and General Manager, Project Development for Paladin Energy. He has extensive experience with operations in southern Africa, including Namibia.

Christopher Parks, CPA CGA Chief Financial Officer

Chris was previously Chief Financial Officer of Northern Vertex Mining Corp. and Corporate Controller of Imperial Metals Corporation, and has over 20 years of experience managing the financial affairs of mining companies from the junior exploration stage to production and operations. Chris will act as CFO through the transition period.

Nathalie Pilon, CPA CMA, Director of Finance and Administration

Nathalie is a hands on financial professional who specializes in designing and implementing systems and controls that enable development stage companies to seamlessly transition to production and operations. She has previously performed this role through senior financial positions with Endeavor Mining, Roxgold Inc. and Orezone Gold Corporation.

Kirk Swales, Sales Manager

Kirk has over 35 years of sales and marketing experience in the graphite industry. For the last 17 years he has been with Imerys SA and was responsible for the sale of concentrates from the Lac des Iles mine.

Gregory Bowes, CEO, commented that, “On behalf of the Board of Directors I wish to welcome Dave, Chris, Nathalie and Kirk to the team as we embark upon a very exciting journey in transitioning from a development stage company to a producer. John McNeice CPA CA is resigning as CFO and the Board of Directors would like to thank him for the very capable and efficient manner in which he handled this role over the past four years. John will remain as Corporate Secretary and will assist with the transition of Northern’s finance functions to the new team.”

The Board of Directors has approved the issuance of a total of 975,000 stock options to the above-named individuals in connection with their appointment, subject to the approval of the TSX Venture Exchange with respect to pricing and other terms.

The appointments of Dave Marsh as Chief Operating Officer, Chris Parks as Chief Financial Officer and Nathalie Pilon as Director of Finance and Administration remain subject to the approval of the TSX Venture Exchange.

Australian firm Battery Minerals has received a mining licence from the Mozambican Government for its Balama Central graphite project.

The project will allow the firm to produce 50,000 tonnes per annum (tpa) of graphite concentrate.

Battery Minerals chairman David Flanagan said: “This is another important milestone for the Balama Central graphite project for the production of graphite concentrate.”

According to the previous feasibility study, the Balama Central project will require $69.4m in capital investment.

It is expected to have an operational life of 27 years.

In August 2021, Battery Minerals signed a deal to sell its Mozambican subsidiary Suni Resources to Tirupati Graphite for $9.1m in cash and Tirupati Graphite shares.

Suni Resources owns the Montepuez and Balama Central graphite projects.

The sale is part of Battery Minerals’ efforts to focus on its Australian mineral exploration assets.

Flanagan added: “We look forward to completing our sale agreement for our Mozambican graphite assets with Tirupati Graphite announced in August 2021 in the coming months.”

The transaction is planned to be completed over the coming months.

Tirupati Graphite CEO Shishir Poddar said: “Both the Montepuez and Balama Central projects now hold granted mining licences, which, on completion of the acquisition, advances Tirupati on its journey to becoming a material supplier to the high-growth EV and battery markets and playing a part in the global energy transition.”

Located around 260km east of Pemba, the Balama Central project is currently in the advanced feasibility study stage.

The project includes two main graphite ore bodies, which comprise mineral resources of 32.9Mt at a grade of 10.2% TGC.

Walkabout Resources has commenced construction prestart activities at its Lindi Jumbo Graphite Mine in Tanzania, in order to bring into production what is scheduled to be the one of the highest margin graphite projects in the world.

Securing a US$20 million debt funding facility from CRDB Bank of Tanzania for the high-grade, large flake graphite project in April 2021 was a critical milestone in the company’s advancement to construction, as was the company completing the first stage of its companion equity contribution in May 2021.

The second tranche of a three stage development capital raise is currently underway with shareholders to be invited to participate in a Rights Issue on the same terms as the Institutional Placement to raise up to A$7.6 million and which closes on Monday 25 June (refer ASX announcement 12 May 2021). Alternatives for the final and third tranche are currently being assessed by the Board with an announcement expected before the end of the quarter.

Commenting on the imminent commencement of construction, Allan Mulligan – Chief Operating Officer of Walkabout Resources said, “The Lindi Jumbo Mine is rapidly materialising and on track for first production in the second quarter of 2022. At Walkabout, we have always done what we said we would do, and it has been very rewarding finalising planning and project logistics this week. Our focus in stage 1 and 2 construction are on those items on the critical path including the civils required for plant erection and the continued manufacture and shipping of plant equipment from our EPC contractor in China.

The CRDB debt facility provided a critical platform from which to commence raising the companion equity. Our second tranche capital raising is underway in tandem with price tensions in the large flake graphite market and as we mobilise contractors under stage 1. As such, we are expecting a very positive response from shareholders.”

At completion of the third tranche equity raising, Walkabout will be fully funded to production with construction and commissioning expected to take 9-12 months. Such a short time to production gives Walkabout an early mover advantage.

“What sets Lindi Jumbo apart from most other graphite deposits is its very high percentage of Large, Jumbo and Super Jumbo sized flakes in concentrate, positioning us to capture premium priced and value added industrial markets. With large flake graphite prices increasing by more than 2% in April and demand from the lithium-ion battery industry expected to outstrip supply by 2025, Roskill has predicted prices will continue to rise,” concluded Mulligan.

The Lindi Jumbo project economics are spectacular with an after tax internal rate of return of 119% and a steady state EBITDA of US$42-46 million.

Lindi Jumbo represents the first serious construction effort of a mining project in Tanzania since the 2017 Mining Act amendments. Since April this year, new President Samia Suluhu Hassan has seen Tanzania renew discussions with international resource companies to expedite large projects, tackle coronavirus with a new advisory committee and also reinvigorate international relations to promote investments and drive trade. This can only benefit Lindi Jumbo as Tanzania revitalises its approach to attracting international businesses.