PERTH (miningweekly.com) – Graphite developer Syrah Resources has warned of more cost increases at its Balama project, in Mozambique, along with delays in the commissioning timeline.
Syrah on Monday said that capital costs for the project had increased from $200-million to $205-million on the back of delays in completing the construction of the processing plant.
First production of flake graphite has been delayed from August to October.
The ASX-listed company said that the reduced power availability and the delay to construction completion had impacted on the plant commissioning. The need to commission the plant sequentially had extended the delivery date for first production by an additional three weeks.
The company said it was exploring options to bring forward the start of production, and that it was reviewing project and operations cost to minimise additional expenditure.
By the end of June, Syrah had spent some $162.3-million on the project, with a further $23.7-million committed at the end of the quarter, bringing total current capital expenditure to $186-million. The project was about 90% completed at the end of last month.
The Balama project is expected to produce 365 000 t/y of graphite concentrate during its first ten years of production.
Syrah stock fell by 7.4% to A$2.88 a share on the ASX on Monday.