Biden Administration offers $145m loan to Syrah Resources (ASX:SYR)

Company News

by Melissa Darmawan

The Biden administration has granted a conditionally backed loan to Syrah Resources (ASX:SYR) to the value of $145 million (US$107 million) to expand its Vidalia processing facility for electric vehicle battery components in Louisiana.

Once approved, Syrah aims to accelerate its growth strategy in its downstream business and support the rapidly growing EV and battery supply chain in the USA.

Meanwhile as the graphite miner continues to suffer shipping constraints at Nacala, shipments through Pemba could provide some reprieve.

Credit Suisse notes that the company has loaded its first shipment via Pemba and confirmed plans for further shipments through 2022. The broker further also said that following the Nacala recovery, the addition of Pemba could see an additional 210,000 tonnes in shipments this year. While near-term cash burn is estimated at US$15 million a month, the broker notes that the $250 million equity raising provides a buffer. Credit Suisse has stamped the company with a neutral rating with a price target of $1.65.

Shares are trading 14.7 per cent higher to $1.83.

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