US agency to own 20% of graphite miner Syrah in critical minerals push

US International Development Finance Corp. is swapping a loan made to graphite producer Syrah Resources Ltd. for equity, as Washington seeks to shore up access to critical metals and reduce dependence on China.

DFC will convert a $31 million existing loan to shares in Syrah in two tranches that will give it a stake of about 20% in the company that operates one of the world’s biggest graphite mines in northern Mozambique, according to a statement. The agency will also disburse an additional $15 million to the subsidiary operating the project. Graphite is a key material in the anodes of rechargeable batteries used in electric vehicles and energy storage systems.

China accounted for 78% of mined graphite output last year, according to the US Geological Survey, and manufactures an even greater share of the purified product used in batteries. “In today’s era of global competition, economic security is national security,” DFC Chief Executive Officer Ben Black said in a separate statement. “With this transaction, we will secure US access to one of the largest graphite reserves in the world, supply jobs for the US and our allies, and support a valuable hub of economic activity for the people of Mozambique.” DFC recently agreed to provide $600 million to a consortium headed by specialist investor Orion Resource Partners, which has announced a deal to buy stakes in Glencore Plc’s copper-cobalt mines in the Democratic Republic of Congo.

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It’s also considering $700 million of funding for a tungsten mine in Kazakhstan and agreed to loan $565 million to develop a Brazilian rare earths mine. Syrah has struggled with a market that’s been oversupplied by much cheaper synthetic graphite made by Chinese producers. The DFC funding has helped the company to continue operating. Syrah also operates a plant in Louisiana that turns graphite into anode material for EV batteries, which has faced repeated delays in finalizing an offtake deal with Tesla Inc.

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