Australian mining company Syrah Resources announced that U.S. electric vehicle manufacturer Tesla has withdrawn its intention to terminate the agreement for the supply of graphite materials used in batteries, after acknowledging that the miner is now producing samples that meet the required quality standards.
The decision comes as a relief for Syrah, which operates the Balama Graphite Mine in Cabo Delgado Province, widely regarded as the world’s largest integrated natural graphite operation.
Following the announcement, the company’s shares surged on the Australian Securities Exchange, rising by more than 41% and marking their strongest single-day performance since October 2023.
The dispute between the two companies dates back to July 2025, when Tesla notified Syrah of alleged non-compliance issues in active anode material (AAM) samples produced at its Vidalia facility in the U.S. state of Louisiana. The facility is currently the only large-scale integrated battery anode material producer outside China.
In a statement released to the market, Syrah said that Tesla acknowledged the progress made and accepted that the company is now producing samples that comply with the agreed technical specifications.
Despite withdrawing the termination notice, the electric vehicle manufacturer retains the contractual right to terminate the agreement if the Vidalia facility fails to obtain the final qualification required for commercial supply.
Under the agreement signed in 2021, Syrah committed to supplying approximately 8,000 tonnes of anode materials to Tesla over a four-year period, in a partnership considered strategic for diversifying the global supply chain of critical battery minerals.
Market analysts believe the announcement eases pressure on the Australian company, although risks remain regarding the achievement of final product certification. Syrah and Tesla had agreed in March this year to a fourth extension of the deadline to resolve the dispute, setting June 1 as the final date for evaluating the progress achieved.
For Mozambique, the development is being closely monitored, as the Balama mine remains one of the country’s most important mining projects and a strategic asset in the growing global demand for minerals essential to the energy transition.
