Graphite player Syrah Resources [Syrah] emerged from a trading halt on Monday, disclosing its Balama operations in Mozambique have been hampered by ‘illegal industrial action’.
Syrah said it’s in discussions with the Internal Union Committee and Mozambique Government officials to work towards a resolution to the ongoing situation.
SYR shares slumped more than 20% on the news.
Year to date, SYR shares are down 22%.
Source: TradingView
Syrah’s Balama Project hit by industrial action
On Monday, Syrah advised of interruptions at its Balama Graphite Operation, describing the complications as ‘illegal industrial action by a small contingent of local employees and contractors’.
The strike has disrupted operations at Balama.
SYR also said the small contingent — while ‘not representative of the majority of the Balama workforce’ — managed to disrupt access to the site.
Out of caution, Syrah halted operations and moved its workforce ‘from site’ on 20 September.
Syrah said it’s working with Mozambique’s Internal Union Committee and the Mozambique Government to resolve the matter.
SYR elaborated:
‘Syrah is focussed on resolving the industrial action through mediation and negotiation under the legal framework of the Company Level Agreement in order to safely restart operations at Balama.
‘Syrah fully supports the rights of employees and contractors to collectively organise under Mozambican labour law and is committed to working constructively with the Union to resolve outstanding issues.
‘Following a review of security, the Company is coordinating the return of employees and contractors to return to site and planning for Balama’s full operational capability to be restored as soon as possible.’
Syrah expressed that its strong relationship with its employees as well as the Mozambique Government have been ‘integral to the successful development and operations at Balama’.
Brief graphite production update
Syrah also noted in Monday’s update that its Balama site had produced 38kt natural graphite in the quarter.
‘Natural graphite sales are 54kt for the quarter to date with approximately 5kt of further shipments from Nacala this month that will not be impacted by the industrial action’, Syrah said.
The great EV battery race
Manufacturers like Ford and Tesla are ramping up production, and governments are pushing for decarbonisation the world over.
Yet the rush to pivot to EVs is also leading to a supply crunch.
More battery tech materials will be needed if this is going to work.
Lithium, graphite, copper, nickel, and cobalt…pushing prices higher.
Our energy expert Selva Freigedo thinks the industry is set for a supply crunch and has recently profiled three key metals at the forefront of the EV revolution.
To read Selva’s ‘Three Ways to Play the Great EV Battery Race’, click here.
Regards,
Kiryll Prakapenka,
For Money Morning
