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- Syrah Resources (SYR) has updated details of its offtake agreement with Tesla
- Last week, the company said it had executed an offtake agreement with Tesla to supply natural graphite Active Anode Material (AAM) from its vertically integrated AAM production facility in Vidalia, USA
- Today the company added further details, including that the offtake obligation is conditional on the parties agreeing the final specifications of AAM by no later than December 31, 2022
- If it proceeds, the agreement with Tesla will provide a foundation to proceed with the initial expansion of Syrah’s production capacity
- Shares in Syrah last traded at $1.33
Syrah Resources (SYR) has updated details of the offtake agreement with Tesla announced to the market last week.
The company said it had executed an offtake agreement with Tesla to supply natural graphite Active Anode Material (AAM) from its vertically integrated AAM production facility in Vidalia, USA.
Today the company added further details, including that the offtake obligation is conditional on the parties agreeing the final specifications of AAM by no later than December 31, 2022 and achieving final qualification of AAM to Tesla’s satisfaction by no later than May 31, 2025.
Syrah said the agreement may also be terminated if production has not started by May 31, 2024.
Natural graphite concentrate will be transported from the company’s Balama graphite operation in Mozambique to its plant at Vidalia in the US state of Louisiana and then shaped into a sphere and purified to produce an active anode precursor material.
Subject to satisfaction of the conditions, Tesla will offtake 8kt per annum of the proposed initial expansion of AAM production capacity at Vidalia, being the majority of such initial planned production capacity of 10kt per annum.
The company said the agreement with Tesla had been subject to extensive negotiations during which Syrah had regard to the estimated capital and operating costs relating to the expanded production facility.
“The importance and materiality to Syrah of the agreement with Tesla is that it provides a foundation to proceed with the initial expansion of Vidalia’s production capacity,” said the company in its latest market announcement.
“The terms of the Agreement including volume, pricing and term will assist Syrah in
finalising its investment decision in relation to Vidalia. Syrah plans to make a final investment decision for construction of this expanded facility in January 2022, subject to financing commitments.”
Syrah is aiming for its AAM facility to be the first major integrated producer outside China of natural graphite active anode material for electric vehicles.
Syrah is also advancing commercial and technical engagement with other customers to develop Vidalia AAM for mass production.
Shares in Syrah last traded at $1.33.
