Australia’s Syrah Resources has signed a seven-year graphite supply agreement with Canada’s NextSource Materials, securing shipments from Mozambique’s flagship Balama mine and reinforcing Africa’s growing role in the global battery minerals race.
The Balama operation, located in northern Mozambique, is the largest graphite mine in Africa, with a nominal production capacity of 350,000 tonnes per year.
Supply Terms and Conditions
Under the agreement, NextSource will purchase between 34,000 and 68,000 tonnes of natural graphite over seven years starting June 1. The material will supply a large-scale anode production plant the Canadian firm plans to develop in the United Arab Emirates.
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Pricing will be set quarterly by mutual agreement and adjusted for product quality and freight costs, according to Syrah. However, the contract remains conditional on the UAE facility reaching commercial production and securing approval from its future customers to use graphite sourced from Balama.
NextSource is expected to take a final investment decision soon as the project advances from pre-development toward construction.
Stabilizing Balama Operations
The deal comes at a pivotal time for Balama, which has been operating below full capacity amid weak global graphite prices and subdued demand. Syrah has been running the mine in “campaign mode,” scaling production in line with market conditions rather than maintaining continuous high output.
A stable, long-term offtake agreement could provide more predictable revenue streams and allow smoother operational planning.
Africa’s Expanding Battery Minerals Footprint
Beyond corporate strategy, the agreement underscores Africa’s expanding influence in the global energy transition supply chain. Graphite is a critical component in lithium-ion battery anodes, making it essential for electric vehicles and large-scale energy storage systems.
As manufacturers in Western and Asian markets seek to diversify supply chains away from highly concentrated sources, African producers are emerging as increasingly strategic partners.
For Mozambique, sustained exports from Balama could boost mining royalties, export revenues and foreign exchange earnings. While commodity cycles remain volatile, long-term supply contracts tied to downstream battery manufacturing offer greater predictability and may help deepen the country’s integration into higher-value segments of the global minerals industry.
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