Syrah Resources plans restarting Mozambique’s Balama graphite mine by June 2025 after unrest shutdown, easing global supply disruptions and prices.
Syrah Resources is actively progressing the resumption of operations at its Balama Graphite Operation in Mozambique, following a nine-month shutdown caused by civil unrest and local protests. The Australian mineral producer aims to restart natural graphite production by the end of June 2025, with product shipments expected to commence several weeks thereafter.
The cessation of operations, with Syrah declaring force majeure in December 2024, stemmed from a combination of widespread civil unrest following Mozambique's contentious federal election in late 2024 and targeted protests by local farmers. These farmers had historical grievances related to land resettlement, and their non-violent demonstrations, which began in September 2024, blocked access to the mine site.
Access to the Balama site was restored in early May 2025, after Syrah reached an agreement with the farmers and the Mozambican government in April. Subsequently, maintenance and inspection teams, along with various contractors, were remobilized to prepare for the restart. Inspections conducted thus far have not identified any significant damage to the plant, mine pit, tailings storage facility, or associated infrastructure, although minor maintenance is required due to the prolonged outage. The restart process is prioritizing power restoration, camp preparation, and site security, with the sequential preparation of crushing, milling, flotation, filtration, drying, and product screening and bagging areas. Crucially, Syrah has an existing inventory of approximately 400,000 tonnes of run-of-mine ore, sufficient to support at least three months of plant operations, meaning mining activities are not immediately critical for the resumption of production.
The shutdown had significant economic and industry-specific impacts. Balama represented approximately 15% of global natural graphite production capacity and a substantial 40% of non-Chinese supply. Its closure led to considerable supply disruptions in the ex-China natural graphite market, resulting in natural graphite prices increasing by 15-20% between December 2024 and April 2025. The resumption is expected to stabilize prices and improve material availability for battery manufacturers and other industrial users who faced constraints. Syrah's finished product inventory is currently fully depleted, indicating a strong latent demand from customers, and the company plans to prioritize break-bulk shipments to expedite deliveries and cash receipts.
Geopolitically, the restart is significant for the critical minerals supply chain, particularly for electric vehicle (EV) battery production, where graphite is a key component. The US International Development Finance Corporation (DFC) has played a role, providing a 150 million loan to Balama to support expansion and supply chain resilience. The DFC also plans to convert a 31 million loan into equity, acquiring a roughly 20% stake in Syrah, as part of a broader US strategy to secure access to critical minerals and reduce reliance on China.
For Mozambique, the Balama mine has made a cumulative contribution of 598 million to the national economy and invested an additional 4.4 million in community development projects since 2018. The country had lost its position as Africa's top graphite producer during the mine shutdowns, and the recovery of Balama is seen as vital for the revival of Mozambique's graphite sector. Syrah aims to increase Balama's annual production to between 200,000 and 240,000 tonnes in the medium term to keep pace with the battery industry's growth and reduce unit production costs, although the global graphite market remains oversupplied, largely due to high stock levels in China, which continues to weigh on prices.
