SYRAH RESOURCES SIGNS MOU WITH ASMET

The Australian based mining company Syrah Resources has announced that it has signed a memorandum of understanding (MOU) with British company Asmet for an offtake agreement to supply between 100,000 and 150,000 tonnes of graphite per year from its Balama graphite and vanadium project in the northern Mozambican province of Cabo Delgado.This is in addition to the MOU that Syrah has signed with the China Aluminum International Engineering Corporation (Chalieco) covering between 80,000 and 100,000 tonnes of graphite per annum.Syrah will now provide Asmet with between two and three tonnes of sample graphite. If the sample meets expectations, a formal offtake agreement will be adopted whereby Asmet will buy up to 150,000 tonnes per year at a price of a thousand US dollars a tonne over a five year period.Asmet intends to use the Balama graphite in foundry applications and high quality steel production. According to Syrah, “Balama graphite is considered ideal for use as a recarburiser as it contains low harmful impurities”.Syrah states that high quality recarburiser sells for between 1,200 and 1,500 dollars a tonne. It therefore believes that it is highly competitive at a price of 1,000 dollars.In another development, the local government in Chinese province of Heliongjiang has announced plans to close polluting graphite mines. The province accounts for 45 per cent of Chinese production and 29 per cent of global output. As a result, Syrah has been approached by several China based companies. However, it states that its preferred option is to distribute its graphite in China through Chalieco.In addition, the company states that it is in advanced discussions with a large European graphite trader and it expects to make a further announcement in June.In December last year the company stated that it was confident that the mine can be developed for less than a hundred million dollars. There is a world-class deposit of graphite at Balama, along with vanadium. According to Syrah, Balama contains far more graphite that the known reserves in the rest of the world.Graphite is a form of carbon that is highly valued due to its properties as a conductor of electricity. It is used in batteries and fuel cells and is the basis for the “miracle material” graphene, which is the strongest material ever measured, with vast potential for use in the electronics industries.