‘We have a huge opportunity,’ Syrah’s CEO talks about next major expansion of Vidalia, Louisiana, facility
Published 5:15 pm Wednesday, May 25, 2022
VIDALIA, La. — Amid a current $180 million expansion project, Syrah’s CEO Shaun Verner said the industry is already looking toward another opportunity to expand in the not-too-distant future.
Verner returned to Vidalia, Louisiana, for the first time since the COVID-19 pandemic for a meet and greet reception on Tuesday evening at The Gables.
There, he said Syrah’s next major expansion could come hot on the heels of the first as the demand for the Active Anode Material, or AAM, that Syrah produces is growing very rapidly.
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AAM is used in lithium-ion batteries, commonly found in electric vehicles.
“Today in the US there’s maybe demand for 80,000 tons to 100,000 tons (of AAM),” Verner said. “Over the next seven to eight years, that will go to 400,000 to 500,000 tons of anode material. The plant we’re building here today will only produce 11,000 tons. That’s a huge opportunity.
“By the end of next year, we’ll have built a plant with 11,000 tons of capacity and today we’re thinking about what comes next after that. We’re already working through the possibility of expanding the plant to 45,000 tons in the coming years,” he said.
Verner added Syrah looks to become “the premium supplier” of AAM in the United States.
Thanks to the support of numerous investors, Syrah is well on its way to funding its next expansion, Verner said.
As the industry looked to expand, Syrah was working to procure a loan from the Department of Energy. At the same time, Syrah was able to raise over $180 million from investors to expand the Vidalia facility, Verner said.
“When we took the investment decision for the expansion in February this year, we didn’t know if we were going to be able to secure the loan from the DOE and were still working on that process. So, we raised the money we needed and we have everything we need to build the facility.
“Then in April, we received an additional commitment from the DOE for $107 million US dollars for the facility as well. That is fantastic because what it allows us to do is focus on the project today, apply that loan money to the project, and take the excess amount of equity we raised for the project and focus on the next phase of development.”
Where did Syrah come from?
Syrah began with a mining exploration project in 2011. In late 2013, they were looking for uranium in Mozambique but instead stumbled upon “the world’s largest natural graphite deposit,” Verner said. He added, “It is extremely big and high quality.”
This led to a huge mining operation that employs approximately 1,100 in Mozambique. The graphite is shipped from the mine to the Vidalia plant, where it goes through a process to produce AAM.
“Nobody else in the U.S. is producing this material and no one else behind us has the size of the mine that we have in Mozambique to supply the facility that we’re putting in place here,” Verner said.
When the industry looked to set up roots in the United States in 2018, the rural Louisiana town checked all the boxes for everything it needed, Verner said, including the availability of power, utilities, a good site with room for future growth as well as a supportive government and community.
He added a large part of Syrah’s success comes from the support the project received from the federal, state, “and especially the local level,” he said.
Toward the end of last year, the Vidalia Mayor and Board of Aldermen, the Concordia Parish Police Jury and the Concordia Parish School Board all signed off on an industrial tax exemption program that would give the industry an 80% reduction in property taxes during the expansion.
“One of the sad parts about this past couple of years is that I haven’t been here since February 2020 and I was planning to come here two or three times a year before that,” Verner said. “The good part about me not being here is that when I got back there was a lot of activity going on at the site. This activity is being supported very heavily by the local community.”
Additionally, Syrah announced in December that an offtake agreement has been reached with Tesla Motors, the world’s top supplier of electric vehicles.
“The team that did that here did it from scratch,” Verner said. “Because so much of this material is produced in China, there is not a lot of experience in the industry outside of China. … It was an incredible achievement for a very small team.”
Verner assured the attendees of Tuesday night’s meeting that respect for the environment, community involvement and job creation are top priorities.
“We have been very focused right from the start of the project to hire locally as much as we can and to contract locally as much as we can,” he said.