US DFC approves $150M conditional loan commitment for Syrah Resources

2023-09-12

Sep. 12, 2023 - The US Development Finance Corporation’s (DFC’s) Board of Directors approved the provision of up to $150 million in financing to Twigg Exploration and Mining—a wholly-owned subsidiary of Australia-based Syrah Resources Limited—to fund investments in the company’s graphite mining and processing operation in Balama, Mozambique.

The DFC loan is for a maximum principal amount of US$150 million and a term of up to 13 years. Interest on the DFC loan will be fixed at applicable long-dated US Treasury rates plus a margin.

Pending United States Congressional notification following its Board approval, DFC will be able to issue Twigg a conditional commitment letter for the loan.

While the approval of the conditional loan commitment demonstrates DFC’s intention to support Twigg with a loan for Balama, there is no certainty that a loan from DFC will ultimately be provided to Twigg. The DFC loan is subject to the completion of due diligence, negotiation of detailed terms and legal documentation, DFC management approval and Syrah and Twigg Board approvals.

If finalized, this represents the first DFC loan to a graphite operation, demonstrating importance of Balama to bolstering US supply chain security for supply of critical minerals.

If completed, the DFC loan will fund capital requirements of the Balama Graphite Operations including:

Feasibility studies for the development of Balama’s vanadium resource;

Current and future expansion of Balama’s tailings storage facility (TSF); and

Working and sustaining capital in Balama operations.

Syrah applied to DFC for loan funding in June 2021 and due diligence by DFC on Syrah commenced in September 2021. DFC has subsequently undertaken technical, market, environmental, social and legal due diligence on Syrah, Twigg and Balama.

In July 2022, the US Department of Energy’s (DOE) Loan Programs Office (LPO) closed a $102.1-million loan to Syrah for the expansion of its Syrah Vidalia Facility in Louisiana—a processing facility that produces graphite-based active anode material (AAM), a critical material used in lithium-ion batteries for electric vehicles (EVs) and other clean energy technologies.

Natural graphite for the Syrah Vidalia Facility will come from the mining and processing operation in Balama, Mozambique.

The US International Development Finance Corporation (DFC) is the US Government’s development finance institution. DFC was established in 2019 through the passage of the BUILD, or Better Utilization of Investments Leading to Development, Act which strengthened and modernized American development finance.