Ann: Syrah signs 80,000 TPA Chalieco Binding Offtake Agreement, page-43

Part of report from The Australian 11/2/15 by Barry Fitzgerald
http://www.theaustralian.com.au/bus...ite-offtake-deal/story-e6frg9df-1227215268456

CHINA’S state-owned Chinalco — Rio Tinto’s biggest shareholder with 9.9 per cent — has moved to secure new supplies of the increasingly strategic carbon material, graphite, from Melbourne’s Syrah Resources.
Chinalco’s engineering arm Chalieco has signed a binding supply agreement covering 35 per cent of planned production from Syrah’s huge high-grade Balama deposit in northern Mozambique.
The deal covers the delivery of 80,000 tonnes of graphite for an initial for three years, with pricing at market-linked prices.
That a Chinese powerhouse like Chinalco — it is one of the world’s biggest aluminium groups — has been the first to sign a binding offtake agreement for Balama graphite was described yesterday by Credit Suisse analyst Michael Slifirski as being “strategically very significant’’.
While China controls close to 70 per cent of the world’s graphite production, Balama is set to change the status quo because its much higher grades and other quality attributes mark it apart from China’s high-cost and environmentally challenged production.
Chalieco said Balama was one of the best graphite deposits “ever known to man.’’
Syrah shares climbed 20c or 5 per cent to $4.05 on news of the binding offtake agreement. It is now valued at $665 million, up massively on its 2011 value of $10m when it first went to Mozambique to try its luck,
But the shares have only recovered to the level of last November ahead of the sale of a $57m parcel of shares, for personal reasons, by former managing director Paul Kehoe.
He was replaced by former director Tolga Kumova who holds 9 per cent of the company. He said yesterday he was intent on establishing Syrah as the “dominant supplier of the highest quality graphite in the world’’. He said more supply agreements were in the pipeline.
The company is planning a staged development of Balama, with first production possible from mid-2016. A feasibility study is due before the end of the current quarter.