Syrah Resources
A view of the plant under construction at the Balama graphite project in Tanzania.
ASX-listed graphite company Syrah Resources is driving positive change and economic growth in Mozambique through its Balama project.

The US$200 million Syrah Resources project is set to be the largest graphite producing mine in the world when it reaches nameplate capacity, COO Darrin Strange tells Laura Cornish.

The Balama graphite project sits on a 110 km2 granted mining concession located within the Cabo Delgado province in the district of Balama in northern Mozambique. It is wholly-owned by Syrah Resources’ locally registered company Twigg Exploration & Mining Limitada.

Syrah Resources
Syrah Resources COO, Darrin Strange.

After acquiring the property late in 2011, Syrah Resources spent the next three years drilling and exploring the site and subsequently confirmed the largest graphite resource in the world – “enough to operate comfortably for well over 50 years,” says Strange.

And while its size alone is significant, the COO adds that Balama’s grade is also one of the highest – with a life-of-mine total graphite content (TGC) of about 19%, this is nearly double the grade of ‘typical’ graphite deposits in China and Brazil.

The completion of a scoping study and feasibility confirmed the project’s attractive economics – enough for the company to raise funds and commence construction in the third quarter of 2015.

A proactive working relationship with the government has also contributed positively to the entire process, Strange adds. Attaining all the major licences to develop the project; including mining concession, environmental license and land access (DUAT), water licence and various other licences for construction; was a relatively smooth process.

Now, nearly two years later, the project is nearing 80% completion with an on-site workforce peaking at about 1 900 people (comprising a large local contingency). “We started commissioning the project in May and start producing graphite in the third quarter of this year.”

CPC partners Syrah Resources at Balama

Syrah Resources
3D representation of Syrah Resources’ Balama graphite project

CPC Project Design is proudly supporting Syrah Resources with the development of its Balama graphite project in northern Mozambique. CPC assisted Syrah during the early stages of feasibility and flowsheet design and subsequently was awarded engineering, procurement and operational readiness for the process plant and infrastructure facilities. This contract award followed on from the front engineering design phase. A close working relationship between CPC and Syrah has been instrumental in achieving the project schedule for the world’s largest graphite project. To date CPC continues to provide on-going construction and commissioning support services to Syrah.

Uplifting Mozambique

The fact that the Balama graphite project is expected to operate in Mozambique for many decades means that Syrah Resources is invested in the country for the long haul. The money it invests in its employees, the local community and the environment will all pay handsome dividends for them and the country further down the line.

In particular, the company is largely committed to employing local community members. Of the 550 people directly employed by the company at present, 73% are from the eight host communities local to the mining concession.

“We are also in the process of recruiting skilled local Mozambican managers and technical specialists and will look to employ approximately 600 in-country personnel once we move into production,” Strange highlights.

All of the employment efforts carried out by Syrah Resources on the ground are conducted in close collaboration with the chief of the host communities to ensure that a fair and equitable approach is taken.

The company has already hired and trained up locals across various disciplines including mining, processing, human resources, training, procurement, warehousing, health and safety and infrastructure.

There is also currently a 23% representation of women across the company, holding management and general management positions. Diversity and equal opportunity feature prominently in the company’s induction and training programmes.”

2020 The year in which Syrah Resources will be the largest individual graphite producer in the world with 40% market share

“Our ability to work with and up-skill local communities is a critical element of our license to operate and will directly determine the enduring benefit we create in the Balama district. We have established genuine meaningful relationships with our community stakeholders and were awarded the prize for Best Company for Social Responsibility at the Cabo Delgado Economic Fair (FECAD) in 2014.”

Syrah Resources is also near concluding its resettlement action plan (RAP) that involves the relocation of a number of farms which overlap land on the company’s mining lease. The programme has been a great success and is recognised in Mozambique as a leading example of how such programmes should be implemented.

[quote]Beyond its people, Syrah Resources is strongly committed to environmental sustainability and to minimising its impacts on the local environment wherever possible.

Finally, Syrah Resources has also built up a significant corporate social responsibility (CSR) effort. Key community projects have been delivered across the host communities over the last two years which include the installation of solar powered water stations, mechanical water boreholes, fencing of the Balama district hospital, solar powered lighting at the local school and donations to sporting teams and key community groups, to name a few.

The company’s local development agreement (LDA) stipulates a commitment of $15 million to social projects over the mine concession across three main areas: physical projects, local employment and training, and health promotion.

The company is also in the in the final stages of negotiating a memorandum of understanding (MOU) with the National Institute of Employment & Professional Training & Labour Studies (IFPLAC) and is excited at the prospect of forming a partnership with IFPLAC to establish and manage the Balama training centre.

The centre will see a minimum of 500 people from the local communities trained across a variety of disciplines including basic artisan training, agriculture development, English classes and health promotion.

Project specifics

A large-scale open pit will feed 2 Mtpa (ROM) into a process plant (with a 380 000 tpa nameplate capacity) to produce 356 000 tpa of graphite – which is four to five times as much as the next biggest graphite producer Strange points out. The project can deliver at this rate for 42 years based on current reserve and resource figures.

The mining methodology is very “simple”, encompassing free digging and no blasting – because the material is very friable. Mozambique-based contract miner Tayanna (with some 20 years of experience working on the coal mines in Tete) was been awarded the contract to mine on behalf of Syrah Resources.

Mining will first commence at the Balama West pit, after which a second pit, Balama East, will be opened up two or three years into the mining schedule.

The plant comprises conventional process streams. The mined material, generally anything under 500 mm will be crushed and reduced to below 80 mm.

A sequence of grinding, flotation, cleaning and re-cleaning follows to produce two concentrate products – a flake courser material and an finer flake material – which is placed into two concentrate tanks where it is dewatered to produce a ‘graphite cake’ which holds around 10 – 12% moisture.

This material is then dried, screened and inserted into 1 t bulk bags, placed in a 5 000 – 10 000 t holding shed before being transported to Nacala by rail where it will be shipped to overseas markets.

In line with its production start-up date, the company also recently announced that it awarded a graphite distribution and logistics services supply contract for Balama to Grindrod Mauritius, which 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.

Grindrod’s contract for the Balama project is aligned with the company’s commitment to promote regional economic growth by pioneering capital projects from conception to implementation.

The purpose built cross dock facility, 4.7 km from Nacala Port, the long haul trucking operation and the clearing and forwarding arm, will employ approximately 180 local people.

Graphite markets and downstream considerations

Syrah Resources is comfortable that demand for such large quantities of graphite will be driven by the rapid emergence of the electric car market – which requires graphite to produce the batteries needed for the cars to operate. “This market is going to drive graphite demand and we are positioning ourselves to cater to this need.” The company will supply into the traditional refractory and steel-making markets as well.

Earlier this year Syrah Resources signed a non-binding memorandum of understanding (MOU) regarding sales and supply chain cooperation with the world’s largest manufacturer of battery anode materials for lithium ion batteries – China-based BTR New Energy Materials.

Based in Shenzhen, BTR is also a world leader in technology development and production of battery anode materials supplying both the Chinese domestic and export markets.

Outside of its MoU with BTR, the company is also evaluating other secondary downstream processing options to improve Balama’s graphite purity from 95% to 99%.

Infrastructure ease

The Balama project is approximately 260 km by road west of Pemba and is accessible by a sealed, main road, running directly from Pemba airport. The Port of Nacala is approximately 490 km by road south east of the project.

The project’s required 10 MW of power will be delivered from a 15.4 MW diesel power station which will be commissioned by early June. “At this point in time grid power is too unreliable but is something we will consider in the future, along with solar power.”

Syrah Resources has also secured a 10 year water licence to extract up to two million cubic metres of water every year from the nearby Chipembe dam. Strange says Balama will likely only use between half a million and a million cubic metres a year as the project has been designed to reuse and recycle water from within its operational processes.

All images courtesy of Syrah Resources

Feature image: An aerial view of the plant under construction at the Balama graphite project in Mozambique.

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