Syrah shares jump on South Korean supply deal
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More news: Shares in Syrah Resources jumped as much as 10% to 67 cents in early trading on the ASX after the graphite miner announced it signed a deal with South Korean battery giant Posco Future M.
The six-year deal will see Syrah supply graphite fines from its Balama mine in Mozambique to Posco.
Ahead of today's gains, Syrah shares had lost nearly two-thirds of their value over the last 12 months amid stagnant global demand for the key ingredient used in electric vehicle batteries.
Syrah Resources signs supply deal with South Korea's Posco
The news: Graphite producer Syrah Resources has signed an offtake agreement with South Korean battery electrode maker Posco Future M to supply natural graphite from its Balama mine in Mozambique.
The numbers: Syrah will supply up to 24,000 tonnes of graphite fines in the first year to Posco, and lift this to 60,000 tonnes from the second year of the six-year deal.
The price will be mutually negotiated on a quarterly basis, referencing independent price indices.
The context: Syrah said the agreement would help it to geographically diversify its sales mix. It currently supplies the Balama graphite to US firms Graphex Group and Westwater Resources, its own Vidalia active anode facility in the US as well as other battery producers.
The supply deal comes close on the heels of export controls on the key electric vehicle battery ingredient by China, which came into effect in December. Syrah said there has been increasing interest from battery makers and auto makers in sourcing graphite from outside China.
The source: ASX announcement
