US agency to buy 20% stake in graphite miner Syrah

The United States International Development Finance Corp. (DFC) plans a strategic investment in Australia’s Syrah Resources (ASX: SYR), which owns Louisiana’s Vidalia active anode material facility and Mozambique’s Balama graphite mine.

The agency will convert a $31 million loan into equity in Syrah, taking a roughly 20% stake as Washington moves to secure critical minerals and reduce reliance on China, according to a statement dated Wednesday. The conversion will occur in two tranches and make DFC the miner’s second-largest shareholder.

DFC will also provide an additional $15 million to the subsidiary that operates Balama, one of the world’s largest natural graphite deposits. The deal remains subject to due diligence and government approvals.

“In today’s era of global competition, economic security is national security,” DFC CEO Ben Black said in a separate statement. He added the investment would help secure U.S. access to a major graphite resource, support jobs across allied markets, and boost economic activity in Mozambique.

Direct stakes

The move is part of a broader U.S. strategy to strengthen domestic and allied supply chains in mining and mineral processing, sectors where China maintains a dominant position. The U.S. government has recently begun taking direct equity stakes in critical minerals companies such as MP Materials (NYSE: MP) and USA Rare Earth (Nasdaq: USAR) as part of a broader push to secure domestic supply chains for essential materials and cut its dependence on Chinese output.

DFC recently committed $600 million to a consortium led by Orion Resource Partners targeting Glencore’s (LSE: GLEN) copper-cobalt assets in the Democratic Republic of Congo. It is considering investing $700 million into a tungsten project in Kazakhstan, and has approved a $565 million loan for Serra Verde’s rare earths development in Brazil.

Graphite is a critical component in the anodes of rechargeable batteries used in electric vehicles and energy storage systems. China produced 78% of mined graphite last year, according to the US Geological Survey, and controls an even larger share of battery-grade processing.

Syrah has faced pressure from an oversupplied market flooded with cheaper synthetic graphite from Chinese producers, though DFC backing has helped sustain operations. 

The company runs a Louisiana facility that processes graphite into battery anode material. Delays at the site have slowed progress on a long-anticipated offtake agreement with Tesla (NASDAQ: TSLA).