- Syrah Resources (SYR) will restart production at its Balama Graphite Operation in Mozambique after production was halted in March last year
- The workforce was cut by 65 per cent due to travel restrictions, limited workforce mobility and weak end-user demand
- Syrah is working towards first production at the plant in the next two to three months
- Despite previous market decline, Syrah is optimistic that current market conditions will support production
- Syrah Resources is trading 10 per cent in the green at $1.27 per share
Syrah Resources (SYR) will restart production at its Balama Graphite Operation in Mozambique after almost a year-long pause.
It comes after the graphite products supplier felt the brunt of COVID-19 restrictions, halting production in March last year.
In particular, travel restrictions and limited workforce mobility resulted in a labour restructure that cut 65 per cent of jobs in July 2020.
Today’s news will see workers getting back to Balama, with first production at the plant expected within two to three months.
The labour restructure helped preserve cash while production was suspended while retaining operating and marketing capability to help restart production.
The graphite market felt the strain before COVID-19 hit during U.S.-China trade tensions, which drove the price of spot natural flake graphite down.
Consequently, the demand for electronic vehicles (EV) from China — the world’s top EV market — fell, which was only exasperated by the global economic uncertainty brought on by COVID-19.
However, Syrah Resources states it can now “manage with current travel restrictions, and market conditions are deemed supportive of recommencing production”.
Syrah Resources is trading in the green at $1.27 per share at 11:11 am AEDT.