Syrah Resources said that the expansion of its Vidalia active anode material (AAM) facility in Louisiana, US, will require total installed capital costs of $539m, based on the findings of the definitive feasibility study (DFS).
According to the DFS, the expansion of the graphite-based AAM facility to a 45,000 tonnes per annum (45ktpa) active anode material production capacity is technically viable and financially robust. This is inclusive of an initial 11.25ktpa active anode material.
The capital cost for the expansion project involves all estimated direct and indirect engineering, materials, equipment, construction, and construction-related costs, duties, taxes and a $38m contingency, before the commissioning of the facility.
The DFS has been completed by an integrated study team of Syrah Resources and Worley.
The estimated post-tax net present value (NPV) for the project is between $208m and $794m, and an after-tax internal rate of return (IRR) is between 13.9% and 22.9%, based on active anode material price of between $5,000/t and $7,000/t.
In addition, the DFS estimates the payback period for the expansion project to be between 6.3 and 3.8 years for the same price range of active anode material.
The Australia-based industrial minerals and technology company said that it is moving ahead with transition detailed and long-lead items engineering with Worley.
Syrah Resources will also proceed with other early activities to maintain the momentum prior to a possible final investment decision (FID).
The FID proposal on the Vidalia expansion project is expected to be considered by the company’s board before December 2023.
Syrah Resources managing director and CEO Shaun Verner said: “The completion of the Vidalia Further Expansion DFS is the culmination of an extensive process by Syrah and Worley.
“I would like to thank our study team and Worley for the significant work undertaken to complete the DFS. Importantly, the DFS confirms the compelling economics for a large scale AAM production facility at Vidalia, with robust operating margins assuming realistic, market-based AAM prices.”
In October 2022, Syrah Resources’ fully owned subsidiary Syrah Technologies secured a grant of up to $220m from the US Department of Energy (DOE) for the expansion of the Vidalia active anode material facility.
