SYDNEY, AUSTRALIA: Syrah Resources Limited (ASX:SYR), an Australian company that produces natural graphite, has announced that it has signed a memorandum of understanding (MOU) with Samsung SDI Co., Ltd., a South Korean company that manufactures lithium-ion batteries, to evaluate the supply of graphite active anode material (AAM) from Syrah’s facility in Louisiana, USA.

The MOU aims to finalise a binding offtake agreement by July 10, 2024, for up to 10,000 tonnes per annum (ktpa) of AAM from Syrah’s Vidalia facility, starting from 2026. The agreement will use a floating price mechanism and will support the growing electric vehicle (EV) market. The parties will also cooperate and expand volumes as demand increases.

Syrah is developing Vidalia as a vertically integrated natural graphite AAM supply solution for US battery supply chains. The company is constructing an 11.25 ktpa AAM facility at Vidalia and plans to expand its production capacity to at least 45 ktpa AAM, inclusive of the 11.25 ktpa AAM capacity. The company expects to make a final investment decision on the expansion project in the second half of 2023.

Syrah’s CEO, Shaun Verner, said that the MOU with Samsung SDI was a significant milestone for the company and demonstrated the quality and competitiveness of its AAM product. He also said that the MOU aligned with Syrah’s strategy of becoming a leading supplier of natural graphite AAM to the global battery market.

Syrah is a leading producer of natural graphite, with its Balama operation in Mozambique being one of the world’s largest and lowest-cost sources of natural graphite. Syrah also operates a battery anode material plant in Louisiana, USA, where it converts natural graphite into AAM for lithium-ion batteries.