Syrah (ASX:SYR) announces FID on solar battery system

Image Source: © Allisgood76 | Megapixl.com

Highlights

  • Syrah has approved Balama solar and battery system final investment decision (FID).
  • The solar and battery system is anticipated to reduce the global warming potential of Balama natural graphite products.
  • SYR expects C1 cost savings of around US$8 per tonne at a 15kt per month production rate from the project.

Shares of Syrah Resources Limited (ASX:SYR) have been gaining attention following an FID announcement.

Meanwhile, SYR shares were spotted trading 2.06% lower at AU$1.67 per share at 10:55 AM AEDT.

FID details 

As per the release, the management has approved a final investment decision (FID) to install a solar and battery hybrid power system at Balama Graphite Operation in Mozambique.

Syrah and Solar Century Africa Limited have completed the design, detailed engineering and procurement of the Solar Battery System following an MOU signed with Solar Century in December 2020.

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SYR revealed that it has selected an 11.25 MWp solar photovoltaic installation.

This installation is further combined with an 8.5 MW/MWh battery energy storage system to integrate with Balama’s existing diesel power generation plant.

CrossBoundary Energy has funded the project.

More details on the project

The company intends to deliver the Solar Battery System under a build-own-operate-transfer (BOOT) arrangement.

Image source: © Almir1968 | Megapixl.com

This arrangement will include a 10-year operating lease and an operating and maintenance contract with a Mozambique incorporated project company which CrossBoundary Energy will wholly own.

This project company will own and operate the Solar Battery System over the BOOT term.

However, after the end of the BOOT term, this ownership will be transferred to Syrah at nil cost.

The solar battery system is expected to be commissioned and operate before the end of the March 2023 quarter.

Project’s outlook

The company anticipates that the new Solar Battery System will supply approximately 35% of Balama’s site power requirements.

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This will likely reduce around 35% of diesel consumption for power generation. Moreover, SYR expects a supply of up to 100% of Balama’s power requirements during peak daylight.

Apart from this, the company expects to derive C1 cost savings of about US$8 per tonne at a 15kt per month production rate2.

This is moreover incorporated in Balama C1 cash cost guidance of US$430– 470 per tonne at a 15kt per month production rate.

Bottom line

As per SYR, the project will likely generate an attractive return on capital due to the low upfront capital costs, and fixed costs payable under the BOOT arrangement supported by reduced diesel consumption.  



 


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