Australia-based Syrah Resources has signed a binding offtake agreement with Tesla for the supply of graphite as active anode material from its Vidalia production facility in the US state of Louisiana.
Tesla will take the majority of the planned initial expansion of production capacity there at a fixed price for an initial term of four years. The agreement also includes an option for additional volume.
The exact volumes and prices have not been revealed. According to Reuters, Tesla said that no company in the United States is capable of producing graphite with the specifications and capacity required for its production.
The announcement of the Tesla deal drove Syrah shares in Australia to a three-year high. Syrah Resources Stock moved up over 35% since the announcement a few days ago.
Syrah Resources announced the deal on Twitter yesterday:
Around 70%of all natural graphite is currently mined in China, and almost 100% is processed there. Other countries with known graphite deposits are Brazil and, as in this case, Mozambique. There is currently an exponential increase in demand for natural graphite for EVs that even outstrips the increasing demand seen by lithium and other elements such as nickel and cobalt.