Australia’s Syrah Resources said on Monday it had signed a seven-year graphite supply agreement with Canada’s NextSource Materials, covering shipments from Mozambique’s Balama mine to feed a planned anode production plant in the United Arab Emirates.
Under the agreement, NextSource has committed to purchase between 34,000 and 68,000 tonnes of natural graphite over the contract period beginning June 1. The material will be sourced from the Balama operation in northern Mozambique, one of the world’s largest graphite deposits and the biggest producing mine in Africa.
Syrah said sale prices will be determined quarterly by mutual agreement and adjusted for product specifications and freight costs. The company did not disclose the contract value.
The graphite will be used to supply a large-scale anode plant that NextSource plans to develop in the UAE. Anodes are a key component in lithium-ion batteries used in electric vehicles and energy storage systems, positioning the agreement within the fast-growing global battery supply chain.
The supply deal comes as Balama has been operating below its nominal capacity of 350,000 tonnes per year due to weak global graphite demand and subdued prices. In recent years, Syrah has adopted a “campaign mode” production strategy at the mine, scaling output up or down depending on market conditions in an effort to preserve cash and manage inventory.
Industry analysts say long-term offtake agreements such as this one can help stabilise revenues for producers facing volatile commodity cycles, particularly in battery minerals markets where supply expansions have outpaced short-term demand growth.
For NextSource, the agreement is intended to secure additional feedstock for its proposed UAE anode facility, complementing production from its Molo graphite mine in Madagascar. The company has been seeking to integrate upstream mining assets with downstream processing capacity to capture more value within the battery materials chain.
However, the agreement remains conditional on several factors. Commercial production at the UAE anode plant must commence before shipments proceed, and the project is currently in pre-development. NextSource has indicated it expects to take a final investment decision in the near term to move the facility into construction.
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In addition, the use of Balama-sourced graphite will require approval from the future customers of the UAE plant, reflecting increasingly stringent qualification standards in the battery supply chain.
Mozambique has emerged as a significant player in global graphite supply over the past decade, with Balama serving as a flagship operation. The country has sought to leverage its mineral wealth to attract foreign investment and boost export revenues, although infrastructure constraints and commodity price volatility have posed recurring challenges.
The deal underscores the growing strategic importance of graphite, a critical mineral in battery manufacturing. While lithium, nickel and cobalt often attract headlines, graphite accounts for a substantial portion of battery anode material and demand is expected to rise in tandem with electric vehicle adoption worldwide.
For Syrah, the agreement provides medium-term demand visibility at a time when producers are navigating uncertain market conditions. For NextSource, it strengthens supply security as it advances plans to establish a processing hub in the Middle East aimed at serving global battery manufacturers.
If the UAE project proceeds as planned, the partnership could link African graphite production to downstream battery material processing in the Gulf, reflecting the increasingly globalised and diversified nature of the clean energy supply chain.
Graphite has become one of the most strategically important minerals in the global energy transition, driven by its central role in lithium-ion battery production. Every electric vehicle battery contains significantly more graphite by weight than lithium, making the mineral critical to the expansion of electric mobility and energy storage systems.
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Mozambique has emerged over the past decade as a key supplier of natural graphite, largely due to the development of the Balama mine in Cabo Delgado province. Operated by Australia’s Syrah Resources, Balama is widely regarded as the largest graphite mine in Africa and one of the largest globally, with a nominal production capacity of 350,000 tonnes per year.
Despite its scale, Balama has faced headwinds in recent years. Global graphite markets have been pressured by weaker-than-expected electric vehicle demand growth, oversupply concerns and price volatility. As a result, Syrah has operated the mine in “campaign mode,” adjusting output to align with market conditions rather than running at full capacity. This approach has helped manage costs but underscores the cyclical nature of battery mineral markets.
Mozambique’s broader mining sector has been seeking to capitalise on rising demand for critical minerals, even as the country grapples with infrastructure gaps and security challenges in parts of Cabo Delgado. The government has promoted foreign investment in mining as a pillar of export diversification and revenue generation.
On the downstream side, Canada’s NextSource Materials has been pursuing a vertically integrated strategy aimed at linking raw material production to battery anode manufacturing. In addition to its Molo graphite mine in Madagascar, the company has announced plans to develop a large-scale anode production facility in the United Arab Emirates.
The UAE project is intended to position the Gulf state as a hub in the global battery materials supply chain, as countries outside Asia seek to diversify processing capacity. At present, China dominates graphite processing and anode production worldwide, prompting governments and companies to explore alternative supply routes for strategic and commercial reasons.
Long-term supply agreements, such as the seven-year deal between Syrah and NextSource, are increasingly common in the battery minerals space. They provide producers with revenue visibility while giving downstream processors greater certainty over feedstock availability — a key requirement for securing financing and customer contracts.
Against this backdrop, the Balama supply agreement reflects both the growing geopolitical significance of critical minerals and the efforts by African producers and international developers to embed themselves more deeply into global clean energy value chains.
