Mozambique inaugurated a new graphite production plant in Niassa province last week, marking a major step in efforts to revive a mining sector that has struggled amid declining global demand.
The Nipepe project, developed by Chinese company DH Mining, represents an estimated US$200 million investment. The mine has an expected annual output of 200,000 tons of graphite and is projected to operate for 25 years, according to company sources. The plant currently employs about 890 people, with a second phase expected to boost staffing to 2,000. Specific production targets for 2026 have not yet been disclosed.
The launch comes after Mozambique’s graphite output fell sharply in 2024, following years of market pressures. Until 2023, production was concentrated at the Balama mine, operated by Australia’s Syrah Resources, and the Ancuabe mine, run by Dutch group AMG. Both companies faced declining prices and competition from synthetic graphite.
AMG exited Mozambique in 2024 with the closure of Ancuabe, while Balama suspended operations from mid-2024 and only resumed in June 2025 under a campaign-based production model. This approach restricts output according to market demand rather than maintaining continuous full-capacity operations.
U.S. Geological Survey data show that national graphite production dropped from 98,000 tons in 2023 to 75,000 tons in 2024. The sector’s slowdown prompted the launch of Nipepe, which analysts say could restore Mozambique’s position as a key graphite producer.
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Foreign investment drives growth
The Nipepe project is part of a broader trend of Chinese and U.S. investment in Mozambique’s graphite sector. Near the former Ancuabe mine, Australia’s Triton Minerals is advancing another graphite project in partnership with China’s Shandong Yulong. Under a pending deal, Shandong Yulong would acquire a 70% stake for $17 million, with an option to take full ownership. The mine is expected to produce an average of 60,000 tons of graphite per year over 27 years.
Meanwhile, U.S. capital is also supporting Mozambique’s graphite industry. The U.S. Development Finance Corporation provides funding to Syrah Resources at Balama, Africa’s largest graphite mine with a production capacity of 350,000 tons per year. Syrah has indicated plans to increase utilization once global demand for natural graphite recovers, driven in part by the electric vehicle battery market.
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Graphite is among Mozambique’s main mineral exports, alongside coal and gemstones, particularly rubies. Gold is also produced but in comparatively smaller quantities.
The new projects signal a renewed focus on mining in Mozambique, which has seen several of its key assets underperform due to volatile markets. Analysts say foreign capital and strategic investment in large-scale mines like Nipepe could help stabilize production and restore confidence in the sector.
“The launch of Nipepe represents a critical step in reviving Mozambique’s graphite industry,” said a local mining analyst. “With sustained investment, the country has the potential to regain its role as a significant supplier of natural graphite to global markets.”
While the sector faces challenges, including fluctuating commodity prices and the global shift toward synthetic alternatives, Mozambique’s government has expressed commitment to supporting mining operations through regulatory frameworks and partnerships with international investors.
The Nipepe project, backed by Chinese investment, and the ongoing Balama operations, supported by U.S. finance, underscore the growing role of foreign capital in shaping Mozambique’s mining future.
