Ann: June 2024 Quarterly Activities and Cashflow Report, page-81

Not a lot mentioned in the quarterly or the conference call regarding the state of the Balama offtakes with POSCO, Westwater and Graphex or the prospects with BTR New Energy Materials in Indonesia, although a lot has changed with those companies since the agreements were signed.

POSCO Future M

At the time the Binding Agreement was signed in March POSCO’s plans were for their new 80ktpa AAM plant to come online by 2026.

From the Syrah March Quarterly Report :-

In the latest quarterly and conference call Shawn was still optimistic that sales would commence by end of 2025 but the Posco website indicates otherwise.

Ambitions have been abated, plans have been scaled back and delayed, as I understand it FID has not yet been reached for the new plant in South Korea and the reduced capacity anode plant is now not expected until 2027 or beyond as noted on their website :-

http://www.poscochemical.com/en/business/energy.do

Further, the video on that webpage sets out their supply chain plans for battery materials which as far as graphite is concerned are based on BKT in Tanzania in which they are invested.

Westwater Resources

Westwater halted construction on their Anode plant 12 months ago when they failed to get finance. Since then they have secured binding offtakes for all their product but are still unable to get the finance to complete the plant.

https://westwaterresources.net/news-releases/2024/07/18/westwater-resources-announces-off-take-sales-agreement-with-stellantis-for-sale-of-graphite-from-its-kellyton-plant/

Graphex Technologies LLC

Construction of their plant has not commenced and seems unlikely to any time soon. They realized that their Chinese involvement was going to be detrimental to proceedings and resolved to somehow separate themselves from ownership :-

https://www.businesswire.com/news/home/20231219345488/en/Graphex-Group-Provides-Important-Updates-on-its-Global-Mine-to-Battery-Solution-Including-the-Separation-of-its-US-Subsidiary-Graphex-Technologies-LLC-into-a-Standalone-U.S.-company-and-Financing-for-a-200-Production-Increase-over-Current-Levels

However, they were only lending their name and expertise to the venture anyway, it was going to be financed and built by their joint venture partner Emerald Energy Solutions in Warren Michigan :-

https://electrek.co/2022/03/23/michigan-will-get-a-new-graphite-processing-factory-to-support-us-ev-battery-production/

This company has now transitioned into the cannabis cultivation business and no longer mentions graphite on their website. That seems to have been just a venture to get a tenant into their Emerald Business Park. What was everybody smoking when this offtake agreement was signed?

BTR New Energy Materials - Indonesia

Shawn didn’t have any real news on prospects for sales other than he was optimistic that they would eventuate.

From the Syrah March Quarterly Report:-

The plant is set up for combined natural and synthetic production but it seems to be primarily biased towards synthetic if their planned purchases of pet coke are any indication.

https://indonesiabusinesspost.com/risks-opportunities/pertamina-patra-niaga-signs-mou-with-btr-new-energy-material-to-supply-raw-materials-for-anodes/

Everyone knows the bottleneck in the battery anode materials supply chain is that China controls 97% of battery anode production. Despite all the incentives by USA and Europe to encourage diversification away from China, and there are about a dozen projects in the planning pipeline and many more in the dreamtime stage, there is a distinct reluctance by lenders to finance these plants (including Vidalia). That is because there is no way any exChina plant will be cost competitive even with massive government assistance. As Shawn says every potential customer he is dealing with is putting up obstacles to prolong the time that they can continue to purchase from China until tariffs kick in 2027. It seems China’s dominance of the industry is not going to diminish anytime soon.

The positive is that while new players are currently finding it impossible to get into either upstream mining or downstream processing Syrah is already established in both and with the extended time frames necessary to get established in these industries will have a virtual monopoly once things do finally change for the better.