Syrah’s Balama Graphite Mine Stays Offline Amid Protests and Government Inaction

Syrah Resources

Production halt enters third consecutive quarter; force majeure still in effect as inventories deplete

Syrah Resources’ Balama graphite operation in Mozambique remains idle for a third straight quarter, with protest actions and lack of government enforcement continuing to block site access, according to the company’s March 2025 quarterly update.

The mine, one of the largest natural graphite sources globally, has been offline since mid-2024, originally due to farmland resettlement grievances. The unrest has since expanded into election-related disruptions, stalling production and cutting off graphite sales as inventories are now fully depleted.

Sales Collapse as Mine Access Denied

Graphite sales plunged to 1,300 tonnes in Q1 2025, down from 8,700 tonnes in Q4 2024 and 20,100 tonnes in Q1 2024. Syrah reiterated that sales cannot resume until production restarts to rebuild inventory.

The company declared force majeure under the Balama Mining Agreement in 2024—a status still active. While Syrah reached a resolution with the original group of resettled farmers, a small, unrelated group continues to block site access. The Mozambique government has not enforced the company’s legal rights, despite a final court order and provisional injunction issued in March.

Syrah has filed to make the injunction permanent but said it remains uncertain whether local authorities will act on enforcement. The new Mozambique government, formed only in January 2025, has yet to address the situation decisively.

Cost and Strategic Impacts

Balama’s C1 fixed costs remain at $3 million/month, despite temporary cost-saving measures. The halt has impacted community development and stalled Syrah’s ESG programs in the region.

Meanwhile, Syrah’s Vidalia active anode material (AAM) facility in Louisiana remains a strategic priority, with sales expected to start in 2025, pending qualification progress and US policy clarification on Chinese AAM imports. A $165 million Section 48C US tax credit has been secured for Vidalia’s planned expansion to 45,000 t/y AAM, though final investment decisions are still pending.

Syrah ended Q1 with $66 million in cash, including $44 million in restricted funds, of which $9 million is allocated to Balama and $11 million to Vidalia.

With no production timeline announced, Syrah’s flagship Balama operation remains in limbo, potentially jeopardizing its vertically integrated supply chain and expansion plans in the US battery materials market.