The Syrah Resources Ltd (ASX: SYR) share price is rising at long last on Wednesday.
In morning trade, the beaten-down ASX mining share is up 10% to 70.5 cents.
Why is this ASX mining share surging?
Investors have been buying the graphite producer's shares this morning after the company announced a deal with Samsung SDI.
According to the release, the company has entered into a non-binding memorandum of understanding (MOU) with the battery and electronic materials manufacturer.
This MOU will evaluate natural graphite active anode material (AAM) supply from Syrah's vertically integrated Vidalia AAM facility in Louisiana, USA.
In addition, under the MOU, Syrah and Samsung SDI will continue testing and qualifying Vidalia AAM and use commercially reasonable efforts to finalise, by 10 July 2024, a binding offtake agreement for up to 10ktpa AAM from Vidalia commencing from 2026.
This offtake will utilise a floating price mechanism and plans to come into play once Vidalia's expansion to 45ktpa AAM production capacity completes.
Both parties will then continue to co-operate and expand volumes to support the growing electric vehicle market.
Vidalia update
The release also reveals that the ASX mining share's planned development of Vidalia is coming along nicely.
Vidalia is being developed as a vertically integrated natural graphite AAM supply alternative for USA battery supply chains. The construction of its 11.25ktpa AAM facility is progressing toward completion of construction and the start of AAM production.
Looking ahead, a definitive feasibility study (DFS) on the expansion of Vidalia's production capacity to at least 45ktpa AAM, inclusive of the 11.25ktpa AAM capacity, was completed in April 2023.
Syrah is now targeting readiness for a final investment decision (FID) on this further expansion project during the second half of 2023.
Though, the timing of a FID will be determined by customer and financing commitments, as well as consideration of equity market conditions. Detailed engineering, long-lead items and other procurement, and construction activities will follow once the Syrah Board approves the FID.
Syrah shares are still down more than 50% over the last 12 months despite today's gain.
