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PESOE 2025: Graphite Production Expected to Increase by 20%, But Still Below Pre-2024 Levels

PESOE 2025: Graphite Production Expected to Increase by 20%, But Still Below Pre-2024 Levels

The Government forecasts a 20% increase in graphite production for the electric car battery industry, although this growth will not be enough to recover the levels recorded before 2024, according to data from the budget proposal compiled on Monday by the Lusa agency.

According to the draft Economic and Social Plan and State Budget (PESOE) for 2025, currently under review in the Portuguese Parliament, the government estimates production of 41,800 tonnes of graphite this year. This forecast represents a partial recovery from the 64% drop seen in 2024, when production fell to 34,800 tonnes.

In 2023, production reached 97,300 tonnes, after a record 165,900 tonnes in 2022. In 2021, the volume stood at 77,100 tonnes, according to official data.

‘For graphite, the growth forecast is 20%. This increase is due to the start of operations by DH Mining in Niassa,’ reads the budget proposal, referring to the start of operations by a Chinese company in the district of Nipepe on 5 May. When it reaches full capacity, the mining company estimates it will extract up to 200,000 tonnes per year.

Meanwhile, Australian company Syrah announced on 6 May that it had regained access to the graphite mine it operates in Balama, in Cabo Delgado province, about five months after declaring ‘force majeure’ due to intensified post-election protests. During this period, the mine was inactive, accumulating three quarters without any exports of the ore.

For graphite, growth is forecast at 20%. This increase is due to the start of operations by DH Mining in Niassa.

In a statement to the markets, Syrah reported that protests at the mine had ceased following the intervention of the Mozambican authorities, who removed the last ‘illegal protesters’ from the site.

‘Following a formal agreement between farmers, government authorities and the company, most of the protesters ended their protests in Balama in April 2025. A small group of people continued to block access without presenting any legitimate complaint against Syrah,’ the company said in the same statement.

The Australian mining company is now mobilising support teams to the site to carry out inspections and maintenance operations, promising to release information soon on the resumption of operations and the first shipments of graphite.

It should be recalled that on 12 December 2024, Syrah declared a ‘force majeure’ due to the worsening of demonstrations contesting the results of the general elections on 9 October. The protests left around 400 people dead and caused the destruction of public and private infrastructure, significantly affecting the company’s activity in Mozambique.

Following a formal agreement between farmers, government authorities and the company, most protesters stopped the protests in Balama in April 2025. A small group of people continued to block access without presenting any legitimate complaint against Syrah.

The legal term ‘force majeure’ refers to external, unforeseeable and unavoidable events that prevent the fulfilment of contractual obligations.

Syrah is also building a battery materials plant in the United States of America, called Vidalia, which will be supplied with Mozambican graphite. In April last year, the company shipped two tonnes of the ore for this purpose.

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The production of graphite for electric vehicle batteries fell by 64% in 2024, standing at 34,899 tonnes — one of the lowest levels in recent years — according to government data released by Lusa in February.

The Ministry of Finance’s Budget Execution Report for 2024 indicates that this drop corresponded to only 11% of the annual target of 329,000 tonnes and was mainly due to the shutdown of operations at the GK Ancuabe Graphite Mine in 2023.

‘The reduction was also influenced by the interruption of activities at Twigg Mining and Exploration (part of the Australian Syrah group), given the growing presence of synthetic graphite on the international market, exacerbated by labour disputes that culminated in the suspension of mining activities,’ the document states.

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