Syrah's default on its US government debt last week was probably caused in part by the US government's decision earlier in the year to delay restrictions on Chinese materials until January 2027.
What appeared to be a victory for anode makers has turned into a setback for the US and, eventually, for Western aspirations to break Chinese dominate.The object of the US reprieve was to allow car and battery makers more time to adapt to the new regulations, but have they fulfilled their obligations?
Non-chinese Anode makers need to appear to be making a greater effort to show that they have intent to change. After all, the US has let them off the hook but for how much longer. The Trump Administration may speed things up by forcing the issue in the shorter term. Bearing in mind, that it takes up to 2 years to bring new supply online from an advanced-shovel-ready project like RNU - that is next month.
However, regardless of what Trump may or may not do, Syrah has a feedstock issue.
As of November 11, Syrah had $US113 million in cash on hand thanks to a $US53 million loan from the US DFC. $US33 million was restricted for Balama, and $US41 million of the $US113 million was for use on the Vidalia processing plant in Louisiana. Source AFR
Since the Vidalia processing plant is located in a safe jurisdiction (USA), it can be certain that supply flows will be controlled. However, this is not the case for Balama in Mozambique, where civil instability has hindered progress since October's presidential elections. Making it more difficult to obtain regulatory support to prevent the disillusioned and displaced farmers from demonstrating. As a result, Balama has not mined graphite for more than five months.
If Syrah can't get feedstock to supply Vidalia, which is still on track, where else can it be sure of material from a sovereign-trusted source to supply it other than Canada, which is already stretched?
Perhaps, Australia could be considered a logical and secure backup plan for their feedstock. After all, SYR is backed by Aussies and AustralianSuper right?
Perhaps DC has a lot of possible deals to attend to.
ALL IMO, DYOR, GLTA(Patient)H
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