Tesla seeks first US battery graphite with Syrah supply deal

The US-based carmaker has agreed to take the majority of battery-ready graphite from a production facility planned in Louisiana, as it races to secure supplies of the key material in a market dominated by China.

Photo: John Thys/AFP/Ritzau Scanpix

Melbourne-based Syrah Resources Ltd. will supply Elon Musk's company with graphite anode material for an initial four years, with an option to buy additional volumes subject to further expansion at Syrah's Vidalia plant, the Australian company said in a statement. The Louisiana facility is planned to process graphite from Mozambique to become the first US-based source of graphite anodes for the country's fast-growing electric vehicle and lithium-ion battery manufacturing industry.

The deal with Tesla would help underpin a final investment decision on the production plant expected next month and help secure local supply, Syrah's Managing Director Shaun Verner said by telephone. China produces almost all of the graphite used in producing materials for anodes, demand for which is forecast to increase fivefold by the end of the decade, according to BloombergNEF.

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