CM – Australia’s Syrah Resources soars on Tesla graphite supply deal

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FILE PHOTO: A logo of the electric vehicle manufacturer Tesla is seen near a shopping complex in Beijing, China, Jan. 5, 2021. REUTERS / Tingshu Wang

Syrah Resources Ltd said Thursday it signed a four-year contract to supply electric automaker Tesla with graphite anode materials from its Louisiana plant, bringing the Australian company’s shares up 32 percent shot.

The deal with Tesla, the world’s most valuable automaker, comes at a time when automakers around the world are battling to source components for making electric vehicles.

Tesla will purchase most of the graphite production expected from the planned capacity expansion at the Syrah plant in Vidalia, with an option for further acquisitions.

Graphite is used in the lithium-ion batteries that power electric vehicles. About 70 percent of all graphite comes from China, and there are few viable alternatives for batteries.

Tesla recently said that no company in the United States is able to manufacture graphite with the specifications and capacities it needs to manufacture it .

Syrah said Thursday the deal provides « a compelling foundation to continue with the initial expansion of Vidalia’s manufacturing capacity ». In January the company will make a final investment decision for the project.

In addition, discussions are being pursued with other target customers to secure additional long-term purchase commitments for Vidalia.

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