My knowledge of the graphite market is limited but I am on a...

My knowledge of the graphite market is limited but I am on a learning curve to try to understand it.

My theory is that the USA (or Europe) is no better off strategically tying their graphite supply chain to Mozambique than buying from China. China has a strong trade relationship with Mozambique and has invested strongly under their Belt and Road Initiative. They could potentially sometime in the future bid to take over Syrah and the Australian FIRB would not be interested in intervening. Maybe that is Australian Super’s long term strategy.

The US DOE understands this and is backing (with grants and loans) Australian company Novonix to build a 30ktpa (ramping up to 150ktpa in the future) synthetic graphite production facility and Anovion Technologies with a 40ktpa plant. ESG considerations seem to be taking second place to security of supply when there is currently zero production of natural graphite happening in the USA. I’m sure there will be more in the future.

To my mind this does not bode well for Syrah, their sales are going to continue to be primarily to China and as we have seen lately the Chinese can use the company, for whatever reason, strategic or otherwise, as a plaything.

I would welcome contrary theories from people on here who certainly know more than me about the situation.