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BFS shows strong economics for Syrah's Vidalia graphite plant Metal Tech News – December 2, 2020
Driven largely by rapid growth in the domestic production of electric vehicles, it is expected that U.S. lithium-ion battery manufacturers will need at least 133,000 metric tons of coated spherical graphite per year by 2030.
Syrah's Vidalia plant will upgrade graphite mined from the company's Balama mine in Mozambique to the active anode material needed for lithium-ion battery production in the U.S.
Syrah Resources Ltd. has taken another major step toward scaling up production of natural graphite anode material at its facility in Vidalia, Louisiana to help meet the demands of rapidly expanding lithium-ion battery production in the United States.
In order to power electric vehicles and store renewable energy, annual lithium-ion battery production capacity in the U.S. is expected to climb to at least 226 gigawatt-hours by 2030. This production output, however, could top 1,000 GWh (1 terawatt-hour) if Tesla reaches full capacity at its aptly named Texas Terafactory by the end of the decade.
At the more conservative 226 GWh production, lithium-ion battery makers in the U.S. would require roughly 133,000 metric tons per year of graphite anode material by the end of the decade. If Tesla achieves its 1 TWh/yr goal at its Texas Terafactory, and graphite remains the primary anode material, this total could top 588,000 metric tons by 2030.
The anodes in lithium-ion batteries are packed full of graphite that has been rolled into potato-shaped spheres and coated in a hard carbon shell – this is where Syrah's Vidalia plant comes in.
Currently, there are no commercial producers of this coated spherical graphite outside of China.
Syrah's Vidalia facility, however, has the capacity to produce 5,000 metric tons of unpurified spherical graphite and the ability to upgrade 200 metric tons to the purified spherical graphite that meets lithium-ion battery specifications per year. With the installation of a furnace early in 2021, this plant will be able to upgrade the spherical graphite to the final form needed by battery makers, which the company calls natural graphite active anode material.
While 200 metric tons per year of active anode material only represents a fraction of the current and forecasted needs in the U.S., it does represent the furthest progressed vertically integrated production of natural graphite active anode material outside of China. It also provides battery manufacturers a sample of the product to be commercially produced.
A bankable feasibility study completed for Syrah details the Australia-based company's plans to scale up the Vidalia facility to 10,000 metric tons of active anode material per year and looks at a future expansion to 40,000 metric tons per annum.
"The BFS confirms strong positive economics for commercial scale natural graphite AAM production at Vidalia, with robust operating margins implied compared to current observed spot natural graphite AAM prices, which are arguably at the low point of the cycle," said Syrah Resources Managing Director and CEO Shaun Verner.
The natural graphite feeding into the Vidalia active anode material plant would come from Syrah's Balama mine in Mozambique.
Going into 2020, Balama hosted 107.54 million metric tons of proven and probable reserves averaging 15.7% (16.9 million metric tons) total graphitic carbon.
This is more than enough ore to produce roughly 350,000 metric tons of graphite concentrates annually for more than 50 years.
Balama concentrates will be shipped to Syrah's facility in Louisiana, where it will be milled and shaped, purified, carbon coated, and heat treated in preparation to be put into the anodes of lithium-ion batteries.
It is expected to take slightly more than 18,000 metric tons of Balama graphite to produce 10,000 metric tons of active anode material, the balance of the graphite will be a byproduct that could be used for other industrial purposes.
"Vidalia vertically integrated with Balama presents a unique value proposition: scale; independence and localization with USA battery production; critical mineral security; and ESG (environmental, social, and corporate governance) auditability back to the graphite source," said Verner.
To realize the potential of this proposition, Syrah is continuing the front-end engineering and design for the initial 10,000-metric-ton-per-year active anode material production facility at Vidalia. Upon completion of this initial design, expected in the first quarter of next year, Syrah will complete a detailed design that reflects commitments by strategic partnerships and buyers of the anode material.
"The completion of the BFS further enhances engagement with potential offtake customers, financiers, and government, and represents an exciting milestone in the execution of our USA and vertical integration strategy, which commenced in 2016," Verner said.
It is expected to take roughly 34 months and US$138 million to complete the designs, construction, and commissioning of the 10,000-metric-ton-per-day operation at Vidalia. Which would put the facility on pace to reach commercial-scale production late in 2023.
At a conservative 145GWh of annual lithium-ion battery production in the U.S. by 2024, the Vidalia output would only meet about 12% of the roughly 85,000 metric tons of active anode material needed by American battery makers during its first year of construction.
Given the skyrocketing lithium-ion battery demand being driven by electric vehicles and renewable energy storage, and China being currently the only major source of the upgraded graphite anode material needed by these batteries, it seems highly likely that U.S. battery manufacturers will want as much active anode material as Syrah can produce at Vidalia and the federal government would be interested in ensuring the success of this Louisiana facility.
With more than 16 years of covering mining, Shane is renowned for his insights and and in-depth analysis of mining, mineral exploration and technology metals.
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