Syrah Resources signs significant offtake agreement with Posco Future M

Syrah Resources Limited (ASX: $SYR) has announced the signing of a binding offtake agreement with Posco Future M Co., Ltd (KRX: 003670) for natural graphite fines from its Balama Graphite Operations in Mozambique. The agreement, spanning six years, involves a volume of up to 2kt per month in the first year, with the option for Posco Future M to increase it to 5kt per month from the second year onwards. The price will be negotiated quarterly, referencing independently reported price indices for natural graphite fines, with adjustments for product grade and volume. Delivery will take place in South Korea.

Executive Commentary on Offtake Agreement

The offtake agreement with Posco Future M is a significant milestone for Syrah Resources, as it aligns with our sales strategy to transition Balama natural graphite sales to a more geographically diversified and commercially aligned customer base. This agreement underscores the increasing demand for Balama natural graphite from ex-China anode and battery supply chain, and highlights our unique position in natural graphite and AAM supply outside of China. We are pleased to partner with Posco Future M, one of the largest AAM producers globally, and look forward to a mutually beneficial collaboration.

Summary of Syrah Resources' Offtake Agreement and Sales Strategy

Syrah Resources' binding offtake agreement with Posco Future M for natural graphite fines from its Balama Graphite Operations marks a significant development in the company's sales strategy. The agreement reflects the increasing demand for Balama natural graphite from ex-China anode and battery supply chain, and highlights Syrah's unique position in natural graphite and AAM supply outside of China. With the company's ongoing negotiations for further Balama natural graphite commercial supply arrangements with ex-China anode processing and downstream companies, Syrah aims to achieve geographic diversification in its sales to AAM and battery markets from 2024, targeting to sell at least 100ktpa fines to ex-China AAM customers from 2026. The company's medium-term natural graphite sales strategy includes balancing integrated consumption through its Vidalia AAM facility in the USA, with an increasing proportion of sales volume ex-China, and residual sales volumes to China. Furthermore, the increasing interest from battery manufacturers and auto OEMs in directly contracting sustainable upstream supply of ex-China natural graphite for anode processing partners highlights the strategic importance of Syrah to the global battery and anode supply chain. The company's unique position as the only major, independent source of high quality, large volume supply alternative to meet these requirements positions it for a promising outlook in the evolving battery materials industry.