Syrah Resources Limited · ASX:SYR
Syrah Resources — Q2 2022 Earnings Presentation
25 slides from Syrah Resources's earnings presentation, Jul 21, 2022
Slide 1: Q2 2022 Quarterly Activities Report
Q2 2022 Quarterly Activities Report 21 July 2022 Shaun Verner – Managing Director & CEO -
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer This presentation is for information purposes only. Neither this presentation nor the information contained in it constitutes an offer, Investor Relations invitation, solicitation or recommendation in relation to the purchase or sale of shares in any jurisdiction. Thi
Slide 3: Syrah's Value Proposition
Syrah’s Value Proposition Electric Vehicles require graphite ● Electric Vehicle (“EV”) adoption is gaining momentum ● Anodes in lithium-ion batteries used in EVs are made of graphite Syrah’s vision is to be the Graphite is a strategic critical mineral world’s leading supplier of ● Global anode suppl
Slide 4: Syrah's Positive ESG Profile
Syrah’s Positive ESG Profile ✓ ISO:45001 and ISO:14001 certification at Balama ✓ ISO:9001 certification at Vidalia Leading ESG standards ✓ Vidalia expansion project being developed in line with best practice health, safety and environmental standards ✓ Critical Risk Management Framework embedded acr
Slide 5: Q2 2022: Highlights
Q2 2022: Highlights Health and Safety • Total Recordable Injury Frequency Rate (“TRIFR”) of 0.8 for Balama and 17.1 for Vidalia at quarter end • Strong momentum in EV sales and penetration, a key leading indicator for natural graphite and active anode material (“AAM”) demand growth • Global EV sales
Slide 6: EV sales, anode production and Chinese graphite imports strengthen
EV sales, anode production and Chinese graphite imports strengthen Global EV Sales (‘000 Units) Chinese Anode Production (kt) 100105104 Q2 2022: +51% on Q2 2021 93 78 80 67 71 59 58 59 60 58 1,000 +57% 51 52 54 38 42 41 46 44 47 41 +53% 31 900 19 23 24 23 27 13 +61% 800 Jun-21 Jan-20 Mar-20 Jun-20 J
Slide 7: Battery manufacturing and anode material requirements set to rapidly rise
Battery manufacturing and anode material requirements set to rapidly rise Estimated Battery Manufacturing Capacity Pipeline (GWh)1,2 Graphite Battery Anode Material Requirement (kt)1,2 7,000 Global 1,000 Europe North America 7,000 China Europe North America Other Graphite based AAM 998% 995% 990% ma
Slide 8: North American battery market is maturing rapidly to support a large-scale EV manufacturing base
North American battery market is maturing rapidly to support a large-scale EV manufacturing base in the region Location of Planned Battery Manufacturing Capacity in North America Planned Battery Manufacturing Capacity in North America Size Company Location Start (GWh) North American share of global
Slide 9: Syrah's vision is to become a leading supplier of anode products
Syrah’s vision is to become a leading supplier of anode products AAM Vidalia, USA Production Potential Asia Tolling (>20ktpa) Base Europe Customer Potential Additional Potential Further Vidalia Initial Expansion Expansion: Vidalia Expansion + Europe AAM Qualification Facility Expansion + Europe Faci
Slide 10: Q2 2022: Balama Production and Operations
Q2 2022: Balama Production and Operations [CURRENT STATUS] • Maximum inventory positions and ongoing disruption in the global container shipping market continues to constrain Balama production to 15kt per month production rate • 44kt natural graphite produced at 79% recovery during Q2 2022 • Product
Slide 11: Q2 2022: Balama Production and Operations
Q2 2022: Balama Production and Operations Natural Graphite Production (kt) Product Mix (% Fines) 46 44 80% 80% 83% 83% 25 13 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2021 2021 2022 2022 2021 2021 2022 2022 Plant Recovery C1 Costs (US$/t) 1,159 82% 82% 76% 79% 68%1 684 464 543 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2021 2021 2022 2
Slide 12: Balama is the largest natural graphite mining/processing operation globally
Balama is the largest natural graphite mining/processing operation globally Asset Overview Ex-China Natural Graphite Reserves4 Location Southern Cabo Delgado Province, Mozambique Operations 150 Reserve & 107Mt (16% TGC) Graphite Ore Reserve SYRAH Reserve Tonnage (Mt) Greenfield Resource1 1,421Mt (10
Slide 13: Q2 2022: Balama Sales and Marketing
Q2 2022: Balama Sales and Marketing [CURRENT STATUS] • Sold and shipped 44kt natural graphite and all 30kt finished product inventory contracted to customers • Container shipping market disruption continued to impact access to container capacity and freight cost for Balama products on vessels sailin
Slide 14: China graphite fines price stable with constructive market balance
China graphite fines price stable with constructive market balance Natural Graphite Fines Prices (US$/t)1 ▪ Strong demand and disrupted domestic supply has 900 Asian Metal supported increased China domestic graphite fines pricing ▪ Graphite fines demand is strong Benchmark Mineral Intelligence 800 ‒
Slide 15: Q2 2022: Vidalia
Q2 2022: Vidalia Vidalia Initial Expansion • Detailed engineering more than 76% completed with Worley Group • Procurement and contracting accelerated • Key construction activities were piling, fencing and installation of infrastructure in readiness for contractors’ workforce • Construction progressi
Slide 16: Q2 2022: Vidalia
Q2 2022: Vidalia Customer Engagement and Product Qualification • Offtake agreement executed with Tesla to supply 8ktpa AAM from Vidalia at a fixed price for an initial term of four years1 • Market growth and segmentation benefits commercial engagement with other target customers – targeting addition
Slide 17: Vidalia is expected to exhibit robust operating margins and returns
Vidalia is expected to exhibit robust operating margins and returns Vidalia Initial Expansion Project Parameters Operating Cost Estimate (All-in) (US$/t AAM Real)1 Observable Spot Natural Graphite AAM Price Range3: ~$7,350/t – $7,950/t • Vidalia expected to have a competitive AAM production ktpa 11.
Slide 18: De-risking Vidalia's initial expansion
De-risking Vidalia’s initial expansion Date Key Milestones Jun 2022 ✓ Piling, fencing and workforce infrastructure installation underway Jun 2022 ✓ Committed to a significant proportion of capital costs Jun 2022 ✓ Detailed engineering >76% completed May 2022 ✓ MOU executed with Mitsubishi Chemical C
Slide 19: Vidalia Initial Expansion construction and production timetable
Vidalia Initial Expansion construction and production timetable Key Steps in Construction Ongoing Activities • Order critical long-lead items <2 Years • Execute construction contracts sequentially • • Product development and testing (small particle sizes) Equipment trialing (purification, carbonisat
Slide 20: Vertical integration to AAM supply in USA is a key differentiator for Syrah
Vertical integration to AAM supply in USA is a key differentiator for Syrah Balama Graphite Operation1 Vidalia AAM Project2 Sites / Location Benefits of vertical integration to Syrah: ▪ Margin capture / cost protection Supply Chain 1. Mining / Ore Processing 2. Active Anode 3. Active Anode Material
Slide 21: Q3 2022 outlook
Q3 2022 outlook EV sales growth, constructive demand environment for anode material and ongoing Chinese supply disruption driving strong demand and pricing for Balama products Increasing Balama production beyond 15kt per month with consideration of market demand, forward customer contracting and shi
Slide 22: Appendix
Appendix 22 Photo: Balama Ore
Slide 23: Battery and natural graphite fines demand in early stages of growth – driven by EV adoption
Battery and natural graphite fines (-100mesh) demand in early stages of growth – driven by EV adoption Global EV Sales (Millions) Lithium-ion Battery Capacity (GWh) Natural Graphite Demand (kt) 90 80% 8,000 12,000 80 70% 7,000 10,000 70 60% 6,000 60 8,000 50% 5,000 50 40% 4,000 6,000 40 30% 3,000 30
Slide 24: Graphite is a high intensity material in EV batteries, with costs/emissions expected to drive shift towards natural graphite
Graphite is a high intensity material in EV batteries, with costs/emissions expected to drive shift towards natural graphite Battery Mineral Composition of Batteries Natural Graphite Demand for Batteries 2022 100% Silicon LTO 1% 1% Other 0% MCMB 0% Metal Composition % Mass1 Natural 35% Synthetic 63%
Slide 25: Syrah's global business to supply growing battery anode demand
Syrah’s global business to supply growing battery anode demand Contract Sales Liaison, Sales & Shanghai Marketing Hub, UAE Vidalia Active Anode Material Facility, Louisiana USA Balama Graphite Operation, Mozambique Head Office, Australia 25 25