London — The Australian mining company Syrah Resources has announced that it is planning to cut almost a third of the jobs at its graphite mine in Balama district, in the northern Mozambican province of Cabo Delgado.
The mine was officially inaugurated by Mozambican President Filipe Nyusi in April last year. However, in a statement released on Friday the company revealed that as a result of an operational review there will be a significant reduction of production in this quarter and into 2020 with an aim to save 22 million US dollars over a year at Balama.
To achieve these savings, the workforce will be cut by thirty per cent – what Syrah Resources calls “head count reduction”.
In addition to the loss of jobs, the company will undergo a corporate restructuring that will save 1.5 million dollars, primarily through “Executive Management head count reduction”.
According to Syrah’s Managing Director, Shaun Verner, “in light of the deep structural change currently occurring in the graphite market, Syrah has taken clear and disciplined action to temporarily reduce production volumes to allow the market to rebalance. We remain committed to the Balama asset and our long term position in Mozambique. We will continue to operate Balama, the world’s best natural graphite asset, in a safe, sustainable and responsible manner to continue to build the sustainability of this operation”.
He added that “we are commencing immediate consultation with employees and key stakeholders to ensure a smooth transition”.
Graphite is a highly valued form of carbon due to its properties as a conductor of electricity. It is used in batteries and fuel cells. However, the price of graphite has fallen as a result of a drop in sales of electric cars in China and doubts over the short term future of electric vehicles.