Australian mining company Syrah Resources has declared force majeure at its Balama Graphite Operation in Mozambique, citing disruptions caused by violent protests following the country’s disputed election results in October. The company confirmed the decision on Thursday, with its stock plummeting by as much as 32.1%, reaching its lowest level since March 2020.
The protests, which erupted in response to contested election outcomes, have intensified over the past weeks, leading to significant disruptions in the region. Syrah Resources reported that it was unable to produce graphite during the crucial December quarter, a blow to the company’s efforts to maintain inventory and fulfill key supply contracts, including a significant deal with electric vehicle maker Tesla.
“The protests have severely impacted the movement of people and supplies, hindering access to the site and disrupting plant operations,” Syrah said in a statement. The company emphasized that its production from the Balama site was essential for meeting both inventory requirements and customer commitments.
In addition to production setbacks, the unrest has caused Syrah to default on loans from the U.S. International Development Finance Corporation (DFC) and the U.S. Department of Energy (DOE). Syrah is currently engaging with both institutions to address the defaults and mitigate the impact on its financial standing.
The situation in Mozambique has raised broader concerns for foreign investors. Earlier this week, South32, a global mining giant, withdrew its production forecast for the Mozal Aluminium smelter, citing similar disruptions from the ongoing protests. The unrest has thus far undermined the stability of Mozambique’s mining sector, with rising political tensions putting critical operations at risk.