ASX-listed Syrah Resources has awarded a graphite distribution and logistics services supply contract for the Balama project in Mozambique to Grindrod Mauritius.JSE-listed Grindrod is based in South Africa and has a long operational history in Mozambique in land transport coordination, agency services and port operations.
Grindrod is represented by subsidiaries, joint venture and associated companies in 37 countries worldwide. Grindrod has significant investment and operational capabilities in the ports of Maputo and Nacala, through which it delivers pit to port logistics solutions, and is committed to the long-term development and growth of Mozambique.
[quote]The key elements of the contract include long haul logistics pertaining to the provision of long haul trucking services for graphite concentrate product from the Balama mine site to the Port of Nacala, which is a distance of approximately 490 km of predominantly sealed road.
Syrah Resources will load Grindrod’s trucks with graphite concentrate packed into 1 t bags at the Balama mine site for delivery to a purpose built cross dock facility near the port of Nacala. The contract has been structured to allow for the number of trucks to be progressively increased in line with ramp-up of production at Balama.
Grindrod will be sourcing new trucks for this contract. Trucks will be in B-Double configuration with a maximum payload of 36 t. At peak capacity there will be 64 trucks operating during day shifts in accordance with fatigue management regulations. A round trip will take approximately two days.
A purpose built cross dock facility (CDF) about 5 km from Nacala will be built and operated by Grindrod and be for the exclusive use of Syrah Resources over the term of the contract.
Grindrod will unload the trucks at the CDF for direct cross docking and packing of graphite concentrate bags into shipping containers. The CDF is designed to hold 500 filled and 1 500 empty TEUs onsite.
Other aspects of the contract include short haul logistics and customs clearing and forwarding.
The construction of the CDF is expected to be completed in Q2, 2018. The parties are developing interim logistics and distribution services and arrangements for the production ramp-up period and prior to the completion of the CDF construction.
The contract has an initial term of five years with the option for Syrah Resources to extend for two further five year periods. The operating cost for logistics and distribution services is expected to be lower than the Balama feasibility study estimate of US$125.70/t.
“The finalisation of this contract represents a very significant milestone for the company with the imminent commissioning of and first production from our Balama graphite project," states Syrah Resources’ MD and CEO, Shaun Verner.
"We are very pleased to be working with a world class and highly experienced African-based organisation like Grindrod, who will also be providing significant employment opportunities in Mozambique as part of this contract.”
“The Balama project represents an opportunity for Grindrod to provide services across a range of business units and establishes a comprehensive pit-to-port solution. Grindrod has had longstanding business relationships in Mozambique and the securing of this contract underpins Grindrod’s ongoing commitment to developing services in Mozambique,” says Grindrod executive for business development, Walter Grindrod.
“The integrated logistics offering brings many advantages to Syrah and in turn its’ customers. We are extremely excited to have concluded this agreement and we look forward to a successful partnership with Syrah Resources in this project.”
Feature image credit: Syrah Resources