Australia's Syrah Resources Ltd said on Thursday it will evaluate supplying a key lithium-ion battery component to South Korea's LG Energy Solution Ltd, sending its shares to a more than four-year high.
The company and LG will work to finalise a binding offtake agreement by Dec. 31 to supply 2 kilotonnnes per annum (ktpa) of graphite active anode material (AAM) from 2025, and increase it to at least 10 ktpa after its production capacity expands to 45 ktpa at its Vidalia facility in Louisiana, United States.
Graphite anodes' popularity has soared as companies race to secure supplies of battery materials used in electric vehicles amid a global push towards cleaner transportation and fuel.
Syrah also said its unit has been selected for a grant of up to $220 million by the U.S. Department of Energy, which will be used to finance the potential expansion of the Vidalia AAM facility.
The company added that it was developing the facility as a natural graphite AAM supply alternative for U.S. battery supply chains, with production targeted to start in the September 2023 quarter.
Shares of Syrah jumped as much as 17.6% to A$2.21, their highest level since October 2018.
Last month, the South Korean battery maker inked cobalt and lithium supply deals with three Canadian miners. It also signed a deal with Lithium Australia's unit to process at least 250 tonnes of its lithium-ion batteries over the next year.
