Syrah Resources Ltd (ASX: SYR) shares are soaring on Thursday following a long-awaited operational update from the graphite producer.
At the time of writing, the ASX mining stock is up 11% to 29 cents, making it one of the best performers on the All Ordinaries index this morning.
Why is this ASX mining stock jumping?
Investors have been fighting to get hold of Syrah Resources' shares this morning after it revealed that it has officially recommenced natural graphite production at its flagship Balama Graphite Operation in Mozambique.
This follows a period of site disruption due to protest activity that began earlier this year.
Following the restoration of site access in May, Syrah has progressively remobilised staff and contractors, completed inspections, and carried out plant maintenance to prepare for the restart.
In light of today's restart, the ASX mining stock advised that it will now "progressively increase plant utilisation and production volumes in an operating campaign to restock finished product inventory in preparation for high volume shipments."
Importantly, Syrah is targeting large volume shipments to ex-China customers in the September quarter. It notes that this is a key development in the context of ongoing global supply disruptions and growing demand for graphite outside of China.
Why this matters
Balama is one of the world's largest natural graphite operations and a critical part of Syrah's vertically integrated battery materials strategy, which also includes its Vidalia Active Anode Material facility in the US.
The restart of Balama is significant not just operationally, but also strategically. According to the company:
There is significant and growing latent demand for Syrah's natural graphite products, particularly in the ex-China market, due to global supply disruptions, including those from Balama.
By resuming output and fast-tracking shipments, the ASX mining stock aims to rebuild inventory, accelerate cash flow, and re-establish supply consistency for downstream customers. Many of whom are looking to diversify graphite sourcing away from China.
One of those customers could be Tesla (NASDAQ: TSLA) in the future. That's because the ASX mining stock recently released an update on its offtake agreement with Tesla for natural graphite active anode material (AAM) from its Vidalia facility in Louisiana.
Previously, the company had stated that the agreement was conditional on final qualification of AAM to Tesla's satisfaction by no later than 31 May 2025. However, this was a target date based on Vidalia's expected start of production.
The good news is that Syrah now has until February 2026 to satisfy Tesla's AAM final qualifications.
