Syrah Resources Limited · ASX:SYR
Syrah Resources — Q2 2024 Earnings Presentation
28 slides from Syrah Resources's earnings presentation, Jul 25, 2024
Slide 1: Q2 2024 Quarterly Activities Report
Q2 2024 Quarterly Activities Report 25 July 2024 syrahresources.com.au Q2 2024 Quarterly Activities Report Syrah Resources | ASX: SYR1 24 July 2024
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: Our Position
Our Position Syrah is a major ex-China natural graphite and active anode material (AAM) supplier for global customers, with upstream and downstream expansion potential underpinned by its world-class Balama resource Natural graphite and Syrah is the only Balama is an up to Ramping up AAM demand is op
Slide 4: Our ESG Profile
Our ESG Profile Leading ESG standards Best practice sustainability Low carbon footprint Auditable back to source frameworks ✓ ISO:45001 and ISO:14001 ✓ Sustainability frameworks guided ✓ Independent life cycle assessment ✓ Fully integrated by Syrah from certification at Balama by: (“LCA”) completed
Slide 5: US Inflation Reduction Act - Section 30D consumer tax credits
US Inflation Reduction Act - Section 30D consumer tax credits Spherical graphite • IRA requires sourcing of non-FEOC (i.e. ex-China) graphite for US EVs to AAM supply Ore extraction and and purification Finished potentially qualify for a consumer tax credit under Section 30D routes concentration pro
Slide 6: Q2 2024 Highlights
Q2 2024 Highlights Balama & Vidalia Market & Corporate Health & Safety – Balama recovery of 78% during operating period with – Global EV sales in Q2 2024 up 24% compared to Q2 24 kt strong cost and ESG performance 2023 to ~4.0 million units4, biased to stronger growth in China Balama production – <U
Slide 7: Balama Production, Operations and Sales
Balama Production, Operations and Sales Plant operations and production in campaigns since Q2 2023 Natural Graphite Production (kt) Product Mix (% Fines) 24 91% 88% 87% 86% 88% 18 20 15 11 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 2023 2023 2023 2024 2024 2023 2023 2023 2024 2024 Plant Recovery C1 Costs (US$/t1
Slide 8: 11.25ktpa AAM Vidalia facility commenced production in February 2024
11.25ktpa AAM Vidalia facility commenced production in February 2024 Milling Purification area area Land for Vidalia Further Expansion to 45ktpa AAM 11.25ktpa AAM facility (milling area) 11.25ktpa AAM facility (furnace area) Furnace Aerial area view 11.25ktpa AAM facility (purification area) Q2 2024
Slide 9: Volatile China anode production continues in Q2 2024
Volatile China anode production continues in Q2 2024 Global Monthly EV Sales (‘000 Units)1 China Monthly Anode Production (kt)2 1,800 Q2 2024 EV Sales 200 Q2 2024 Chinese Anode Production 1,600 +24% on Q2 2023 +32% 180 160 +41% on Q2 2023 1,400 +16% 140 +17% 1,200 +23% 120 1,000 +50% 100 -5% 800 80
Slide 10: Short-term conditions remain challenging
Short-term conditions remain challenging Global EV sales1 vs. China Anode Production2 China Natural Graphite Production vs. China Anode Production2 200 1,800 200 1,600 160 160 1,400 1,200 120 120 1,000 800 80 600 80 400 40 200 40 0 0 Jul-21 Jul-22 Jul-23 Jan-21 Jan-22 Jan-23 Jan-24 Nov-21 Sep-21 Sep
Slide 11: China graphite controls immediately impacted ex-China market
China graphite controls immediately impacted ex-China market China graphite export volumes have increased significantly from January 2024 China natural graphite exports (kt) China spherical graphite exports (kt) China natural graphite AAM exports (kt) 140 70 Japan USA South Korea India Germany Other
Slide 12: Syrah Market Position
Syrah Market Position Q2 2024 Quarterly Activities Report 12
Slide 13: Syrah can capitalise on a graphite market in structural flux
Syrah can capitalise on a graphite market in structural flux Geopolitical and commercial developments in graphite and AAM drive increased opportunities for Syrah margin and volume Market developments Syrah advantages Attractive graphite market outlook relative to other battery Long-term, large scale
Slide 14: Syrah leads ex-China industry in development and operations
Syrah leads ex-China industry in development and operations >9 years advanced on ex-China peers, with >US$700m of investment to date in development, operations, product qualification and commercial sales; deep operating experience Balama Bankable feasibility study Construction and +2 years commissio
Slide 15: Ex-China market size and growth opportunity for Syrah is clear
Ex-China market size and growth opportunity for Syrah is clear Syrah’s existing and planned production capacities represent only a fraction of the opportunity in the ex-China addressable market – lead time advantage creates further opportunity Ex-China natural graphite Natural graphite AAM for ex-Ch
Slide 16: Syrah is a global vertically integrated graphite supplier
Syrah is a global vertically integrated graphite supplier Additional AAM capacity development strategy Balama Natural Graphite Offtake and Marketing Strategy Syrah aims to become a leading supplier Vidalia AAM Facility Geographic diversification in Balama natural graphite sales to AAM and battery ma
Slide 17: Syrah fundamentally changing Balama sales composition
Syrah fundamentally changing Balama sales composition Driving toward higher and more stable utilisation of Balama’s production capacity Balama sales Balama sales Target Balama sales composition (2022) composition (2023) composition (2027) 1 Ex-China Integrated Ex-China 1 Customers Chinese Integrated
Slide 18: Balama is the premier graphite resource and operation
Balama is the premier graphite resource and operation Ex-China natural graphite reserves and reserve grade1 Balama operating costs (US$/t FOB) at different production rates BALAMA 25 CUT-OFF 10kt 15kt 20kt 25kt ~30kt GRADE2 Africa per month per month per month per month per month 800 North America 2
Slide 19: Vidalia is the cornerstone of Syrah's downstream business
Vidalia is the cornerstone of Syrah’s downstream business Downstream expansion is underpinned by Balama’s world-class resource Vidalia, USA Asia (ex-China) Joint Venture / Tolling (>20ktpa) Technology Support to 3rd Party (ex-China) Partners (>50ktpa) Europe Joint Ventures (>20ktpa) Production Base
Slide 20: Vidalia's attractive economics are built on cost and price experience
Vidalia’s attractive economics are built on cost and price experience Potential for significant margin upside as new project inducement drives marginal pricing Economics of Vidalia facility (45ktpa AAM capacity)1 Long-term natural graphite AAM price assumption (US$/kg)3 $11.88 $10.90 $10.58 AAM pric
Slide 21: Syrah's ESG position provides lower emissions & traceability
Syrah’s ESG position provides lower emissions & traceability Global Warming Potential of graphite products (kg CO2 eqv./kg product)1 Syrah Major Chinese ESG element (as proxy for ex-China suppliers) suppliers Vidalia AAM 7.3 >3x ~2x IRMA5 independent Chinese natural graphite AAM 14.2 Responsible Min
Slide 22: Syrah's incumbent position has key advantages
Syrah’s incumbent position has key advantages New ex-China demand, low alternative supply; upstream natural graphite and downstream AAM operations Syrah’s opportunity Stakeholders and customers Customer driven product Transition to higher margin motivated to underpin further iteration and government
Slide 23: Syrah's 2024 targets embedding unique advantages
Syrah’s 2024 targets embedding unique advantages Recent milestones Remaining 2024 targets Capital Structure Dec-21 – Binding offtake agreement with Tesla for the supply of natural graphite AAM from Vidalia Jul-22 – Received a US$102m binding loan from US DOE for the initial expansion of Vidalia Co
Slide 24: Our Valuation Proposition
Our Valuation Proposition Syrah is leading ex-China natural graphite and anode material production capacity and sales growth Vertical Operating and Cost Position ESG Position Expansion Integration Development Potential ▪ Natural graphite ▪ Largest integrated ▪ Cost competitive ▪ Leading ESG ▪ Signif
Slide 25: Appendix
Appendix Q2 2024 Quarterly Activities Report 25
Slide 26: Battery and natural graphite fines demand is in the early stages of growth
Battery and natural graphite fines (-100mesh) demand is in the early stages of growth – driven by EV adoption Global EV Sales (Millions) Lithium-ion Battery Capacity (GWh) Natural Graphite Demand (kt) 90 90% 9,000 9,000 80 80% 8,000 8,000 70 70% 7,000 7,000 60 60% 6,000 6,000 50 50% 5,000 5,000 40 4
Slide 27: Graphite is a high intensity material in EV batteries
Graphite is a high intensity material in EV batteries, with costs / emissions expected to drive shift towards natural graphite Battery Mineral Composition of Batteries1 Natural Graphite Demand for Batteries2 100% 2024 Other Silicon 0% 5% Natural 26% Metal Composition % Mass Synthetic 68% 2040 Other
Slide 28: Syrah's global business to supply growing battery anode demand
Syrah’s global business to supply growing battery anode demand Vidalia, Louisiana, USA Balama, Cabo Delgado Province, Mozambique Sales and Marketing Hub, Dubai, UAE Contract Sales Liaison, Shanghai, China Corporate Office, Melbourne, Australia Q2 2024 Quarterly Activities Report 28