Embattled Syrah Resources wins debt default waiver from US Government backers amid Mozambique turmoil

An AustralianSuper-backed graphite miner whose Mozambique operations are gridlocked by widespread political uproar has been granted some reprieve by its US Government lenders. The United States International Development Finance Corporation (DFC) and United States Department of Energy (DOE) have agreed not to penalise Syrah Resources for breaching terms on debts tied to the Balama graphite mine. The mine has been virtually inoperable since late September when the east African nation geared up for an October presidential election that resulted in the same ruling party getting re-elected, inciting accusations of a rigged vote and mass protests across the country. Despite its attempts to reach a resolution amid the turmoil, Syrah resorted to claiming a “force majeure” under the terms of its mining agreement with the Government in December and has had to negotiate with lenders. “Syrah and DFC have agreed to a waiver of the events of default under the DFC loan associated with the interruption to operations at Balama, subject to certain conditions,” Syrah said in a statement on Tuesday. “The interruption to operations at Balama is being monitored by all parties and Syrah is continuing to work collaboratively with DFC and DOE regarding these events of default.” The US had agreed to lend more than $US250 million ($400m) to Syrah to build up the new source of graphite — used in electric vehicle batteries — as part of a broader mandate to broaden its sources of critical minerals. Balama produced 94,000 tonnes of graphite in 2023 and the operation has capacity of up to 350,000, but sales have slowed in the year since due to oversupply. Having already pocketed $US53m, Syrah won’t be able to access any more cash while protests continue, but the remaining balances remain “committed” according to the company. Syrah’s biggest shareholder is AustralianSuper, which owns 32.9 per cent of the company and has been a substantial investor since 2015. “Operating conditions in Mozambique are challenging with ongoing nationwide protests associated with general elections causing widespread disruptions throughout the country,” Syrah said. Shares in Syrah were down 2.33 per cent at 10.28 AWST to 21¢.