Syrah Resources (ASX:SYR) announced a milestone in its graphite supply strategy, signing a multi-year binding conditional offtake agreement with NextSource Materials.
The agreement covers the supply of natural graphite fines from Syrah’s Balama Graphite Operations in Mozambique.
NextSource is currently advancing towards a final investment decision on its anode material facility in Abu Dhabi, UAE, which is slated to supply a Japanese downstream customer.
Key terms include a total volume of at least 34kt, and up to 68kt, in aggregate over the term.
The contract spans seven years, commencing no earlier than June 1, contingent upon several conditions being satisfied or waived.
Pricing will be determined quarterly based on a premium to an independently reported price index for natural graphite fines, with adjustments for product grade and shipping costs.
The product specification is defined as 100mesh, at 94% carbon or above.
Delivery is set for Abu Dhabi, United Arab Emirates, subject to the commencement of commercial production of NextSource's anode facility there.
The agreement also requires approval from NextSource and its downstream customers to use Balama natural graphite.
Termination clauses dictate that if conditions are not satisfied or waived by Dec. 31, Syrah may terminate the agreement, whereas if conditions are not met by Dec. 31, 2027, NextSource may terminate.