Syrah Resources Ltd said on Thursday it had signed a four-year deal to supply graphite materials to electric car maker Tesla from its Louisiana plant, causing shares in the Australian company to soar up 32%.
The agreement with Tesla, the world’s most valuable automaker, comes at a time when automakers around the world are competing to secure the supply of components used in the manufacture of electric vehicles..
Australia’s Syrah Resources soars on graphite supply deal with Tesla https://t.co/083E1nSThY pic.twitter.com/xosm4AK10U
— Reuters (@Reuters) December 23, 2021Graphite is used to make lithium-ion batteries for electric cars. Graphite is sourced 70% from China, and there are very few alternatives.
Tesla will purchase the majority of the expected graphite output from the proposed Syrah plant capacity expansion in Vidalia, with an additional purchase option.
Tesla recently stated that no US company can produce graphite to the specs and capacities required.
Syrah said on Thursday the deal provides “a compelling foundation to proceed with the initial expansion of Vidalia’s production capacity.” The company is set to make a final investment decision for the project in January.
Company shares were trading at close to a three-year high A$1.75.
