Australia’s Syrah Resources buys more time for Tesla graphite supply deal

Jan 19 (Reuters) – Australia’s Syrah Resources said on Monday it had agreed to extend the deadline for a third time to resolve an alleged breach of its graphite supply agreement with Tesla.

The 2021 agreement to supply 8,000 metric tons of graphite annually for four years is key to Syrah’s Vidalia, Louisiana operations and the company’s strategy to become the first major non-Chinese metal supplier to the United States.

Texas-based Tesla issued its first notice of default in July 2025, saying Syrah had failed to deliver suitable samples of active anode material from its Vidalia processing plant for use in electric vehicle batteries.

The companies have now agreed to postpone the treatment date to March 16, 2026, subject to approval from the US Department of Energy.

The original September 16 deadline was extended to November 15 before being pushed to January 16.

“While Syrah has not admitted that there has been a default under the sale agreement, the parties have extended the remediation date to March 16, 2026 and are cooperating closely to correct the alleged default,” the Australian miner said in a statement. he said.

The Vidalia facility is the only vertically integrated, large-scale manufacturer of anode materials outside of China, offering an alternative to the Chinese materials that dominate the market.

Tesla, led by Elon Musk, the richest person in the world, also retains the right to terminate the supply agreement if the active anode material supplied by Syrah does not meet its specifications by February 9.

Shares of the graphite producer fell 6.6% to A$0.285 in early trading on Monday, reaching their lowest level since December 22, while the broader mining subindex rose 0.6%.

(Reporting by Shruti Agarwal in Bengaluru; Editing by Subhranshu Sahu)