The Key Minerals of the African Continent: The U.S. Scours the Globe for Resources — The U.S. Plans to Acquire 20% Stake in Mozambique’s Syrah Resources, a Graphite Miner

¬ The U.S. International Development Finance Corporation (DfC) plans to convert a $31 million loan into equity in Syrah Resources, aiming to acquire a 20% stake in the Balama graphite mine in Mozambique.

¬ This transaction would make Washington the second-largest shareholder in one of the world’s largest natural graphite deposits, aside from China.

¬ The deal remains non-binding and is subject to due diligence, financing documentation, and approval by relevant regulatory authorities.

The U.S. International Development Finance Corporation (US-DfC), an international investment arm of the U.S. government with a funding ceiling of $205 billion, announced on Wednesday its plan to convert an existing $31 million loan to Syrah Resources Ltd. into common stock. This move would grant the DfC approximately a 20% stake in the Australian-listed graphite producer and potentially position Washington as the company’s second-largest shareholder, according to a statement from the DfC.

The statement also noted that the agency will directly pay $15 million to Twigg Exploration and Mining Limitada, Syrah Resources Ltd.’s Mozambican subsidiary, which operates the Balama graphite mine in Cabo Delgado Province. The conversion will occur in two phases, with the remaining loan balance converted into convertible loan notes—a first for the DfC when dealing with a publicly traded company—and includes warrants granting the agency additional rights to increase its equity stake.

DfC CEO Ben Black said in a statement: "In today’s era of global competition, economic security is national security." "Through this transaction, we will secure U.S. access to one of the world’s largest graphite reserves, create jobs for the United States and its allies, and support a vital economic activity center for the people of Mozambique."

This proposed transaction represents the most direct manifestation of U.S. government ownership of African critical mineral assets and is part of a broader initiative under the Trump administration aimed at reducing dependence on China. China controls approximately 75% to 90% of global natural graphite production and dominates processing for battery-grade graphite. According to the U.S. International Development Finance Corporation (DfC), this new investment aims to mobilize more than five times the capital from private investors.

Frail Foundations

The proposal comes after a turbulent two-year period for Syrah Resources. The company’s share price plummeted from around AUD 2.62 in November 2022 to near historic lows. In December 2024, due to social unrest triggered by Mozambique’s controversial general election, the Balama mine was shut down for eight months, leading Syrah to declare force majeure. According to company filings, this resulted in missed payments on loans owed to the U.S. International Development Finance Corporation (DfC) and a $98 million loan provided by the U.S. Department of Energy (used to build the Vidalia plant). In January 2025, the DfC granted a default waiver and deferred interest payments; then resumed lending in August 2025. The Balama mine restarted operations in mid-2025.

The Balama mine is expected to hold 110 million tons of graphite ore with a total graphite carbon content of 16%, with a projected mine life of 50 years. Industry data indicates that the mine produced 75,000 tons in 2024—less than a quarter of its 350,000-ton annual capacity. Syrah is currently negotiating a commercial dispute with Tesla. In July 2025, Tesla issued a notice of default, alleging that Syrah’s plant in Vidalia, Louisiana—the only vertically integrated natural graphite anode materials facility outside China—failed to deliver battery-grade material samples meeting specifications. According to Syrah’s statement, both parties extended the remediation deadline for the fourth time, pushing it to June 1, 2026.

This proposed investment builds upon the U.S.-Australia Critical Minerals and Rare Earths Supply Assurance Framework signed in October 2025 at the White House by President Donald Trump and Australian Prime Minister Anthony Albanese, which aims to advance priority projects worth $8.5 billion. The AustralianSuper pension fund, which has supported Syrah since 2015 and maintained its status as the company’s largest shareholder, expressed support for the transaction in a statement.

According to China’s Ministry of Commerce, China has suspended its enhanced graphite export controls on the U.S. starting in November 2025, extending until the end of 2026, in an effort to ease short-term trade tensions. However, structural supply risks remain unresolved. If approved, the outcome of Tesla’s graphite certification process at the Vidalia facility (expected to be announced on June 1) will serve as the first commercial test of whether the Washington-funded U.S. graphite supply chain can meet large-scale battery-grade specifications.

Source: ecofinagency

Original: toutiao.com/article/1861043103933451/

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