Syrah Resources Declares Force Majeure at Mozambique Graphite Plant Amid Civil Unrest

Syrah Resources

Sydney-based graphite producer Syrah Resources has declared a force majeure at its Balama operations in Mozambique, signaling significant disruptions due to post-election civil unrest in the country. The declaration comes as the company faced defaulted payments on debts backed by the US government.

Production Halt and Financial Strain

Syrah Resources reported that ongoing protests, which began in late September at the Balama site due to historical farmland resettlement grievances, have escalated following Mozambique's general election in October. Allegations of electoral fraud have led to violent protests across major cities, exacerbating the situation and preventing production activities. The unrest has not only halted production from October through December to replenish inventory but also hindered sales to customers, resulting in a declared force majeure event.

Implications of the Default

The unrest and consequent production stoppage have led to events of default on loans with significant US entities—the US International Development Finance Corporation (DFC) and the Department of Energy (DOE). The US DFC had previously extended a $150 million loan to Syrah for graphite operations, marking its first such financial engagement. Additionally, Syrah received a $102 million loan facility from the US DOE to expand its Syrah Vidalia anode active material facility in the US. The company is currently engaging with both entities to address the defaults.

Despite peaceful protest actions, which have not deliberately damaged property, plant, or equipment at Balama, Syrah acknowledges that resolving the situation will be a lengthy process. The company is striving to restore operations as quickly as possible. Notably, production at Balama has been on hold since July due to adequate existing inventory and low demand for graphite fines.

Syrah Resources Secures Loan Waiver Amidst Operational Challenges in Mozambique

Syrah Resources

Syrah Resources, an Australian-listed graphite producer, has secured a $53 million loan waiver from the US International Development Finance Corporation (DFC), providing crucial financial relief as the company faces operational disruptions at its Balama mine in Mozambique. This development comes weeks after Syrah triggered events of default on US government loans related to the mine.

Force Majeure and Loan Obligations

Syrah declared a force majeure at the Balama site on December 12th due to protests that restricted mine access.  Despite the operational challenges, the company confirmed on January 7th that it has not defaulted on payment obligations related to its $150 million DFC loan or its $102 million US Department of Energy loan.

Loan Waiver and Future Operations

The DFC's waiver applies to the first tranche of its loan to Syrah and is intended to provide working capital for the Balama mine. While operational staff have been evacuated from the site, security personnel remain on-site to protect the company's assets. Syrah will be able to access the remaining portion of its DFC loan once production restarts at Balama. However, the company has not yet announced a restart date.

Production Halt and Market Conditions

Syrah halted graphite production at its Mozambican plant in July due to sufficient inventory levels and weak demand for graphite fines. The company produced 24,000 tonnes of graphite at Balama during the second quarter of 2024 and spent the subsequent quarter utilizing its existing stockpiles.  Syrah had planned to resume graphite production at the site between September and December 2024 to rebuild its inventory.

Political and Social Unrest

Protests at Balama initially began in September but escalated significantly after Mozambique's highest court upheld the results of the October general election, which saw the long-ruling Frelimo party retain power. Syrah reports that operating conditions in Mozambique remain challenging due to the ongoing demonstrations following the elections, which continue to cause widespread disruptions.

Syrah Resources Secures $165 Million Tax Credit for Expansion in the U.S.

Syrah Resources

Boosting Production Capabilities

Syrah Resources, an Australian graphite producer, has been awarded a substantial $165 million tax credit under the U.S. Inflation Reduction Act. This financial boost is earmarked for potential expansion of its Vidalia Active Anode Material (AAM) plant located in Louisiana.

Expansion Plans and Raw Material Sourcing

The tax credit will facilitate the expansion of the Vidalia facility’s production capacity from 11,250 metric tonnes per year to 45,000 metric tonnes per year. This significant increase will support the growing demand for anode materials necessary for battery technologies. Additionally, the Vidalia facility processes natural graphite from Syrah's Balama operation in Mozambique, which is integral to the production of high-quality anode materials.

Syrah Resumes Graphite Production at Mozambique’s Balama Mine

Syrah Resources

Restart of Graphite Operations After Protests

Syrah Resources has resumed graphite production at its Balama mine in Mozambique, with plans to restart large-scale shipments between September and December. The mine, which has a 350,000 t/yr capacity, was shut down due to prolonged protests that blocked access since late 2023.

The company declared force majeure in December, which remains active, but production is now restarting to rebuild inventories. Shipments will resume in September, targeting customers outside China as Syrah seeks to expand its global market share.

Strategic Focus on Ex-China Markets

Syrah chairman Jim Askew confirmed the company aims to increase sales from Balama this year, focusing on diversifying exports away from China. From January to March, Syrah only sold 1,300t of graphite using existing inventories, falling short of obligations.

By ramping up production, the company intends to re-establish stable supply chains and reassure buyers in key ex-China markets, including Europe and North America. This shift aligns with broader industry strategies to reduce dependence on Chinese-dominated graphite supply.

The Metalnomist Commentary

Syrah’s Balama restart underscores the volatility of global graphite supply chains amid political and social challenges in producing countries. While resuming shipments will ease near-term supply pressure, the company’s long-term success will depend on balancing local community concerns with its ambition to secure a stronger foothold in non-Chinese markets.

Balama graphite mine resumes access after prolonged protest disruptions

Syrah Resources

Syrah Resources has regained access to its Balama graphite mine in Mozambique, a key global source of natural graphite. The mine, with a nameplate capacity of 350,000 t/yr, had been cut off since late 2024 due to community-led protests that escalated during post-election unrest. The company confirmed on 5 May that site inspection and maintenance teams have been dispatched, although no formal restart timeline has been set.

Protest resolution clears path for operational recovery

The protests began in September 2024 when farmers blocked access to the Balama graphite mine. Tensions rose in October following Mozambique's national elections, leading Syrah to declare force majeure on some shipments. While operational staff evacuated, security personnel remained on-site. After months of negotiations, Syrah reached an agreement in April 2025 with both local farmers and the government. Authorities secured the mine fully on 3–4 May by removing remaining demonstrators.

Contractual impact and financial mitigation efforts

Syrah sold only 1,300 tonnes of graphite in Q1 2025 from inventory and failed to meet some contracted deliveries. As a result of the December disruptions, the company triggered default conditions on a $150 million loan from the U.S. International Development Finance Corporation (DFC). However, the DFC granted a waiver in January 2025, covering the first tranche and avoiding actual payment default. This financial flexibility may help Syrah stabilize operations at the Balama graphite mine once activities resume.

The Metalnomist Commentary

The reopening of the Balama graphite mine marks a critical moment for global natural graphite supply, especially amid surging EV battery demand. While the mine remains offline, Syrah’s proactive engagement with local stakeholders and the DFC waiver reflect a pragmatic path forward. However, long-term supply stability will require deeper social integration and geopolitical risk mitigation across Africa’s critical mineral hubs.

Syrah Graphite Offtake Supports Non-China Anode Supply Chain Strategy

Syrah resources

Syrah graphite offtake plans with NextSource Materials could strengthen non-China graphite supply routes for battery anode production. The Australian producer may sell 34,000-68,000t of natural graphite fines over seven years, subject to commercial production at NextSource’s planned Abu Dhabi anode material plant.

The Syrah graphite offtake agreement depends on several conditions. NextSource has not yet made a final investment decision on the Abu Dhabi project, and both NextSource and its customers must approve the use of Syrah’s graphite fines. This makes the deal strategically important, but still dependent on qualification, financing, and project execution.

Syrah will supply the material from its Balama graphite mine in Mozambique. The mine produced 34,400t of natural graphite in October-December 2025, up from 25,700t in the previous quarter and no production a year earlier.

Balama Graphite Gains Value as Buyers Seek Supply Diversity

Balama graphite is becoming more important as battery supply chains seek alternatives to China-linked material flows. Syrah said the NextSource agreement prices Balama graphite at a premium to market indices, suggesting that qualified non-China supply is gaining strategic value.

Syrah’s average realised graphite price, including fines and coarse flakes, rose by 11pc year on year to $506/t fob Nacala in October-December 2025. Higher realised pricing supports the company’s effort to rebuild sales momentum after production interruptions and weak market conditions.

The deal also fits Syrah’s long-standing plan to increase graphite sales outside China. The company signed a six-year offtake agreement with South Korean producer Posco in 2024 and agreed to supply graphite to US producers Graphex Technologies and Westwater in 2023.

Graphite Trade Restrictions Increase Supply Chain Urgency

Graphite is moving deeper into the critical minerals policy debate because it is essential for lithium-ion battery anodes. China remains dominant in graphite processing, so automakers, battery makers, and governments are trying to develop alternative sources of feedstock and anode material production.

NextSource’s planned Abu Dhabi anode material plant could add a new processing node outside China if it reaches commercial production. Syrah’s graphite fines would provide feedstock for that strategy, while Mozambique would remain an important upstream source.

The timing matters because graphite trade restrictions are increasing. China recently banned sales of dual-use products, including graphite, to some Japanese producers. This reinforces the need for diversified supply chains that can connect African mine output, Middle Eastern processing, and battery customers in allied markets.

The Metalnomist Commentary

The Syrah-NextSource agreement shows that graphite supply security now depends on qualification pathways, not only mine output. Non-China anode supply chains will need reliable feedstock, bankable processing projects, and customers willing to pay for geopolitical resilience.

Syrah Resumes Graphite Shipments From Balama After Protest Disruptions

Syrah Resources

Syrah resumes graphite shipments ahead of plan after months of protests in Mozambique. The company lifted the December 2024 force majeure. It is loading 10,000t at Nacala for industrial buyers outside China. It plans a large US shipment by late September.

Balama restart and logistics

Balama returned to operation after Syrah reached a farmer agreement. The mine suffered no damage during the protests. Syrah had targeted large shipments in September–December. However, it accelerated the schedule after gaining site access in May. First-quarter sales fell 94% to 1,300t as inventories covered customers.

Implications for the anode supply chain

The restart broadens graphite supply beyond China amid policy uncertainty. Industrial buyers gain an alternative source of natural graphite flakes. EV anode projects in the US benefit from diversified feedstock. Freight through Nacala supports stable exports from northern Mozambique.

Market exposure still requires careful community engagement and security planning. Non-violent protests blocked access in September 2024. Tensions escalated after a disputed election. Effective stakeholder management now underpins Balama reliability.

Syrah resumes graphite shipments as it pivots toward North American demand. The company aims to grow sales outside China in 2025. Execution on logistics and customer qualification remains critical.

The Metalnomist Commentary

Balama’s early restart strengthens non-China graphite options for industrial and battery supply chains. Pricing power now hinges on dependable exports and stable community relations. Watch US intake and customer qualification, which will determine utilization rates this year.