Glencore would be a very logical fit to either take over Syrah or enter into a joint venture for several reasons (they were rumoured to be informally discussing a $2.00 offer in 2024).
Glencore already dominates global supply chains for Cobalt, Nickel, Copper and Zinc - all key battery metals. Graphite is the missing piece in their portfolio. Their business model thrives on controlling entire supply chains from mine to market. It's rumoured they have long wanted stronger US foothold beyond commodities trading - this would give them an entry and a front row seat.
Glencore is the worlds largest commodities trader - by controlling Syrah's output, they could optimise ex-China flows of natural graphite and anode material globally - capturing margins both upstream and downstream.
Whilst their balance sheet could fully fund the expansion and ramp up and stabilize operations - turning Vidalia into a profitable, scaled asset much faster than Syrah could do it on its own (IMO).
Perhaps most importantly - Glencore has an existing relationship with Tesla (via Cobalt) under a long term contract. If Glencore controlled Syrah, Tesla would effectively be dealing with the same trusted partner across cobalt and graphite - reducing counterparty risk and ensuring ESG compliant sourcing.
Instead of Syrah negotiating customer by customer, Glencore could bundle deals, leveraging Tesla and then expanding to Ford, GM and battery makers like Panasonic or LG.
In short: Glencore already being Tesla's cobalt partner makes them the most natural fit to become Tesla's Graphite partner as well - and acquiring Syrah gives them a turnkey way to do that.
Cheers
DYOR IMO
SYR Price at posting:
30.5¢ Sentiment: Buy Disclosure: Held
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