Australia’s Syrah Resources said it was
undertaking a labour restructure at its Balama graphite project in Mozambique,
including a 65% headcount reduction, as production remains suspended due to COVID-19
restrictions. The supplier of graphite products said there was no natural
graphite production at the project during the second quarter, as a result of
restrictions which limited the mobility of the workforce and hit demand of
electric vehicles (EV) sales.
“The current challenging market conditions are
likely to continue into the second half, until Chinese and global EV demand
growth regains momentum, and global steel production recovers”, the company
said in a statement. Graphite producers and suppliers have been hurt by a
prolonged downturn in sales in China, the world’s top EV market, that worsened
as a result of the coronavirus-induced slowdown. As a result of weak market
conditions, the timing of when production at Balama will restart is uncertain,
Syrah added. The cost cutting measures are expected to reduce Balama cash
outflows to $7 million per quarter, with one-off implementation cost of about
$1 million to be incurred during the third quarter. Some 220 roles will be
retained at Balama to support the resumption of production once travel
restrictions are eased and end user demand improves.
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