Editor: Adam Zhang
Heavily shorted graphite miner Syrah Resources has hit speed bump in its plans to develop a beneficiation plant in Louisiana that would give it better access to lucrative battery markets.
Syrah had obtained a lease to build the beneficiation plant near Port Manchac on the outskirts of New Orleans, but the port's governing body (the South Tangipahoa Parish Port Commission) terminated that lease on Tuesday morning after local residents raised concerns about the facility's potential to affect air and water quality.
Syrah said it would review alternative locations for the plant within the state of Louisiana, and said several other options had been considered before Port Manchac was selected.
"We are quite confident that despite the decision today, we will be successful in finding a home for the project in the state of Louisiana," said Paul Jahn, Syrah's chief operating officer for the beneficiation plant project.
Syrah's Balama mine in Mozambique produces flake graphite, which has traditionally been sold to refractories, steel mills and into the lubricants industry, but in recent years demand has emerged from lithium-ion battery producers.
Those battery manufacturers typically want graphite in a beneficiated form, often described as coated spherical graphite, and the Louisiana plant is designed to allow Syrah to sell directly into such higher-margin markets, rather than allowing intermediaries to capture the margin arbitrage between flake and spherical graphite.
Syrah told the ASX it did not expect the lease termination would delay development of a beneficiation plant.