US agency to take 20% stake in graphite miner Syrah Resources

The US International Development Finance Corp. (DFC) plans a strategic investment in Australia’s Syrah Resources (ASX: SYR), the parent company of the Vidalia Active Anode Material facility in Louisiana and the Balama mine in Mozambique, one of the world’s largest natural graphite reserves.

The agency said it will convert a $31 million loan into equity in Syrah, taking a roughly 20% stake as Washington moves to secure critical minerals and reduce reliance on China. The conversion will occur in two tranches and make DFC the second-largest shareholder in the miner.

DFC will also provide an additional $15 million to the subsidiary operating the Balama project. The deal remains subject to due diligence and government approvals.

“In today’s era of global competition, economic security is national security,” DFC Chief Executive Officer Ben Black said in a separate statement. He added the investment would help secure US access to a major graphite resource, support jobs across allied markets, and boost economic activity in Mozambique.

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The move is part of a broader US strategy to strengthen domestic and allied supply chains in mining and mineral processing, sectors where China maintains a dominant position. 

DFC has recently committed $600 million to a consortium led by Orion Resource Partners targeting Glencore’s (LON: GLEN) copper-cobalt assets in the Democratic Republic of Congo. It is considering $700 million for a tungsten project in Kazakhstan, and has approved a $565 million loan for Serra Verde’s rare earths development in Brazil.

Pressure and delays

Graphite is a critical component in the anodes of rechargeable batteries used in electric vehicles and energy storage systems. China produced 78% of mined graphite last year, according to the US Geological Survey, and controls an even larger share of battery-grade processing.

Syrah has faced pressure from an oversupplied market flooded with cheaper synthetic graphite from Chinese producers, though DFC backing has helped sustain operations. 

The company also runs a Louisiana facility that processes graphite into battery anode material, where delays have slowed progress on a long-anticipated offtake agreement with Tesla (: TSLA).