Syrah Resources (ASX: $SYR) reports recordable injury frequency rate of 1.2 at quarter end

Syrah Resources Limited (ASX: $SYR) reported a Total Recordable Injury Frequency Rate (TRIFR) of 1.2 at the end of the quarter ending 31 December 2023. The company also noted higher Chinese anode production with global electric vehicle (EV) sales growing by 37% in 2023 compared to 2022. The quarter saw campaign production of 20kt at 77% recovery, with Balama C1 costs (FOB Nacala/Pemba) of US$534 per tonne in operating periods and C1 fixed costs of US$4 million per month in the non-operating period. Additionally, the weighted average sales price of natural graphite to 3rd party customers was US$490 per tonne (CIF), lower quarter on quarter due to China fines sales prices.

Executive Commentary on Operational Performance and Market Update

The operational performance at Balama remained stable during the October 2023 production campaign, with production averaging at 19kt per month. However, the company faced challenges with higher than expected C1 costs and lower demand from Chinese anode customers, resulting in lower natural graphite sales. The global EV sales growth, particularly in China, has been a positive indicator for the market, but the implementation of export licensing controls by the Chinese Government has introduced uncertainty and administrative barriers, impacting the natural graphite and anode material markets. Despite these challenges, Syrah remains commercially engaged with ex-China natural graphite anode projects and is aiming to execute further significant binding offtake in the upcoming quarter.

Outlook and Corporate Strategy

Looking ahead, Syrah is focused on strengthening plant reliability and operational efficiencies at Balama to ensure strong performance in future production periods. The company's medium-term natural graphite sales strategy involves balancing integrated consumption through Vidalia, with an increasing proportion of sales volume ex-China, and residual sales volumes to China. Additionally, the company is progressing towards the start of AAM production from its 11.25ktpa AAM facility in February 2024, making it the first commercial-scale, vertically integrated natural graphite AAM supplier outside China. Syrah is also evaluating potential partnerships for an AAM production facility in the UK and the Middle East, aligning with the EU Critical Raw Materials Act and US Inflation Reduction Act. The company's engagement with key stakeholders and its focus on ESG initiatives further demonstrate its commitment to responsible production and compliance with international frameworks.