Graphite developer Syrah Resources has secured a $102-million loan facility from the US Department of Energy (DoE) to support the financing of the expansion work at its Vidalia active anode material (AAM) facility, in Louisiana.
Syrah said that finalisation of the binding loan followed a conditional commitment from the DoE in April this year, which was made under its Advanced Technology Vehicles Manufacturing (ATVM) loan programme, which has $15.1-billion in uncommitted loan authority to support the manufacture of eligible advanced technology vehicles including electric vehicles (EVs), and qualifying components and materials, in the US.
The DoE loan to Syrah Technologies is the first from the ATVM loan programme since 2011 and the first ever from the ATVM loan programme to a materials processing facility.
Other recipients of funding from the ATVM loan programme include Ford, Nissan and Tesla.
Finalisation of the DoE loan follows a 12-month process with the DoE’s Loan Programs Office, which included detailed market, technical and legal due diligence on the Vidalia Initial Expansion and extensive negotiation of loan documentation.
The DoE loan has been approved by the Syrah board, the Secretary of the DoE and the US Secretary of Energy Jennifer M. Granholm.
“The finalisation of a binding loan with the DoE under the ATVM programme highlights Vidalia’s strategic position in the US. It provides strong validation of Syrah, Vidalia and the Vidalia Initial Expansion. Importantly, the loan will allow Syrah to accelerate its growth strategy in its downstream business and support the rapidly growing EV and battery supply chain in the US,” said Syrah MD and CEO Shaun Verner.
Granholm said that securing critical materials, such as lithium and graphite, was essential to increasing domestic production of batteries to power the growing number of EVs on the US’ roadways.
“DoE’s investment in the Vidalia Initial Expansion builds on President Joe Biden’s goals to secure our clean transportation future and grow the US’ electric vehicle and advanced battery manufacturing workforce,” she added.
Syrah and the DoE are targeting the loan to be effective by the end of the September 2022 quarter with the first advance from the loan within the December 2022 quarter, aligned with the capital spending programme for the Vidalia Initial Expansion project.
Proceeds from Syrah’s equity raising completed earlier this year are sufficient to fully fund the remaining capital costs of the Vidalia Initial Expansion project.
With advances commencing from the DoE loan, Syrah will use surplus proceeds from the equity raising for a definitive feasibility study on the further expansion of Vidalia’s production capacity to at least 45 000 t/y AAM and, if such expansion is approved, detailed engineering and construction of an expanded AAM facility as well as to provide additional balance sheet flexibility to Syrah.