Syrah Resources Ltd (ASX: SYR) shares are falling on Monday morning.
At the time of writing, the ASX battery materials stock is down 3% to 29.5 cents.
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Why is this ASX battery materials stock falling?
Investors have been selling the graphite producer's shares after weakness in the battery materials industry overshadowed two significant announcements this morning. These relate to its Tesla (NASDAQ: TSLA) offtake agreement and its funding arrangements with the US International Development Finance Corporation (DFC).
Syrah has an offtake agreement with Tesla for the supply of natural graphite active anode material (AAM) from the company's 11.25ktpa Vidalia AAM facility in Louisiana.
Back in July, the ASX battery materials stock revealed that it had received a notice from Tesla alleging that it had defaulted on an obligation to provide conforming AAM samples under the agreement.
The electric vehicle giant set a cure date of 15 November 2025, after which the offtake deal could potentially be terminated if the issue wasn't resolved.
Today, Syrah told the market that the parties have agreed to extend the cure date to 16 January 2026, with both companies "closely collaborating to cure the alleged default."
Syrah also reiterated that it does not accept that it is in default under the agreement.
The ASX battery materials stock added that Tesla retains the right to terminate the agreement if final qualification of Vidalia AAM is not achieved by 9 February 2026.
DFC loan disbursement and interest deferral
In a separate announcement, Syrah advised that it has entered into a new agreement with the US International DFC, which provides additional funding support for its Balama Graphite Operation in Mozambique.
Under the agreement, Syrah's subsidiary Twigg will receive an US$8.5 million disbursement from its existing DFC loan. This funding will be used for working and sustaining capital at Balama.
Following this payment, the outstanding balance on the DFC loan will total US$68 million, excluding origination costs.
The DFC has also agreed to defer approximately US$5 million in interest and fees that were due today, pushing the payment date back to 15 May 2026.
As part of the new arrangement, Syrah will issue the DFC warrants over around 17.5 million Syrah shares, representing up to 1.3% of the company if exercised. The warrants will be issued at an exercise price of A$0.0001 and expire five years after issuance.
The company notes that several events of default tied to the DFC loan remain unresolved, though the DFC has provided a temporary waiver to allow the latest disbursement to proceed. Syrah continues to work toward a permanent resolution.
Syrah's managing director and CEO, Shaun Verner, said:
We are pleased to be continuing our long-term partnership with DFC through the execution of this Agreement. Balama is the largest integrated graphite mining and processing operation globally and is strategically important for supply chain security and the critical minerals supply required for the electric vehicle and energy transition in the US. Syrah is focused on delivering Balama production and natural graphite sales safely to improve cashflow and strengthen ex-China supply resilience with a focus on our stakeholders' objectives.
