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Melbourne-based mining company Syrah Resources has secured a $US102 million ($146 million) loan from the United States government to expand production of graphite, one of the key ingredients needed to make electric car batteries.
As the Biden administration accelerates efforts to grow the US electric vehicle manufacturing industry, the loan from the US Energy Department will be used to enlarge Syrah’s Vidalia plant in Louisiana, which processes graphite mined in Mozambique into battery-ready material.
ASX-listed Syrah Resources has received a loan from the US Energy Department after striking graphite supply deals with Tesla and Ford.Credit:Paul Morris/Bloomberg
“Importantly, the loan will allow Syrah to accelerate its growth strategy in its downstream business and support the rapidly growing electric vehicle and battery supply chain in the USA,” Syrah managing director Shaun Verner said.
The US, Australia and other nations are seeking to diversify global supplies of a range of critical minerals needed to make important products including batteries, computers, wind turbines and military weapons, amid deepening concerns about China’s dominance over the key markets.
ASX-listed Syrah has already struck supply agreements with auto giants Ford and Elon Musk’s Tesla, as they race to lock in future supplies of battery ingredients including graphite, lithium, nickel and cobalt, which will be needed to build millions of electric vehicles in coming years.
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Graphite is used as a component in the negative end of lithium-ion batteries, known as the anode, but almost all of global production is concentrated in China.
As trade frictions fuel concerns in the United States that Beijing could cut off supplies at any time, the US government has been seeking to shore up its own supplies of critical minerals. Earlier this year, the US Department of Defence signed a $US120 million deal with another ASX-listed mining company, Lynas, to build a commercial processing plant in Texas, which would be first plant outside of China capable of separating heavy rare earths.
US Secretary of Energy Jennifer Granholm said the government’s investment in Syrah’s Vidalia expansion project built on President Joe Biden’s ambitions to secure the nations “clean transportation future”.