• The DFC plans to convert a $31M loan into equity in Syrah Resources, targeting a 20% stake in the Balama graphite mine in Mozambique.
• The deal would make Washington the second-largest shareholder in one of the world's largest natural graphite deposits outside China.
• The transaction remains non-binding, pending due diligence, financing documentation and regulatory approvals from relevant authorities.

The US International Development Finance Corporation (US-DFC), the American government's international investment arm with a $205 billion investment ceiling, announced plans Wednesday to convert an existing $31 million loan to Syrah Resources Ltd. into common equity, opening a pathway to a stake of roughly 20% in the Australian-listed graphite producer and potentially making Washington the company's second-largest shareholder, according to a DFC statement.

The agency would also disburse an additional $15 million directly to Twigg Exploration and Mining Limitada, the Mozambican subsidiary that operates the Balama graphite mine in Cabo Delgado province, the statement said. The conversion, structured in two tranches, would roll the remaining loan balance into a convertible loan note — the first such instrument the DFC has ever proposed receiving from a publicly traded company — and include warrants giving the agency the right to expand its holding further.

"In today's era of global competition, economic security is national security," Ben Black, chief executive of the DFC, said in a statement. "With this transaction, we will secure US access to one of the largest graphite reserves in the world, supply jobs for the US and our allies, and support a valuable hub of economic activity for the people of Mozambique."

The proposed deal would mark the most direct assertion yet of American state ownership over an African critical mineral asset, part of a broader push by the Trump administration to reduce its near-total dependence on China, which controls roughly 75% to 90% of global natural graphite production and dominates battery-grade processing. The new investment is structured to mobilize more than five times the fresh capital injection from private investors, according to the DFC.

Fragile Foundation

The proposal arrives after a turbulent two years for Syrah Resources, whose shares traded at around 2.62 Australian dollars in November 2022 and have since collapsed to near historic lows. The company declared force majeure at Balama in December 2024 after civil unrest tied to Mozambique's disputed general election paralyzed the mine for eight months, triggering events of default on both its DFC loan and a separate roughly $98 million facility from the US Department of Energy used to build the Vidalia plant, according to company filings. The DFC granted a default waiver in January 2025 and deferred interest payments before resuming disbursements in August 2025, following the mine's restart in mid-2025.

The Balama operation, which holds an estimated reserves of 110 million metric tons of graphite ore at 16% total graphitic carbon and a projected mine life of 50 years, ran at 75,000 metric tons in 2024 — less than a quarter of its 350,000 metric-ton annual nameplate capacity, according to industry data. Syrah is simultaneously managing a commercial dispute with Tesla Inc., which issued a default notice in July 2025 alleging that the Vidalia plant in Louisiana — the only vertically integrated natural graphite anode facility outside China — had failed to deliver conforming battery-grade material samples. The two companies extended the cure deadline for a fourth time in March 2026 to June 1, according to a Syrah statement.

The proposed investment builds on the United States–Australia Framework for Securing of Supply in the Mining and Processing of Critical Minerals and Rare Earths, signed by President Donald Trump and Australian Prime Minister Anthony Albanese at the White House in October 2025 and targeting an $8.5 billion pipeline of priority projects. AustralianSuper, the Australian pension fund that has backed Syrah since 2015 and remains its largest shareholder, said in a statement it supported the transaction.

China temporarily suspended enhanced graphite export controls to the United States in November 2025 until late 2026, reducing near-term trade friction but leaving structural supply risks unresolved, according to China's Ministry of Commerce. If approved, the outcome of the Tesla qualification process at Vidalia, expected by June 1, will be the first commercial test of whether the US graphite supply chain Washington is financing can meet battery-grade specifications at scale.

Mercy Fosoh, Edited by Idriss Linge