Australia-based Syrah Resources will invest $176m to expand its graphite processing facility in Vidalia in the US state of Louisiana.

The Vidalia facility processes graphite for lithium-ion batteries used by Tesla and other manufacturers in their electric vehicles (EVs).

According to Louisiana Governor John Bel Edwards, the investment by Syrah Resources gives a supply-chain foothold for the state in the quickly growing market for EV components manufactured in the US.

Governor Edwards said: “Today’s announcement by Syrah Technologies is another example of how Louisiana’s commitment to a cleaner energy future can strengthen our economy.

“This is just the beginning of Louisiana’s efforts to help vehicle manufacturers leverage our state’s unique logistical advantages to meet increasing electric car and truck demand.”

The investment will allow the Australian firm to add 180,000ft2 of building and processing space to its existing facility that spans 50,000ft2.

The additional space will be used for installing equipment and systems needed for processing natural graphite into active anode material (AAM), which in turn is used in lithium-ion batteries.

Through the expansion, the company is estimated to produce 11,250 tonnes per annum of active anode material.

Syrah Resources CEO Shaun Verner said: “This is a confirmation of our vision to develop the first AAM facility in the U.S. and in Louisiana.

“Louisiana has all the right elements for the development of new technology in the manufacturing sector, including a vision for sustainable development that aligns well with Syrah’s values. Vidalia is a great community that has access to technology centers and benefits from excellent supply chain logistics optionality for this and potentially future expansions.”

Syrah Resources’ announcement of the expansion follows the offtake deal it had signed with Tesla last December for the supply of natural graphite AAM.

The Australian firm is expected to begin construction on the AAM facility expansion in Q1 2022. Construction is anticipated to be wrapped up in mid-2023 with an aim to begin production of active anode material in the third quarter of the same year.

Syrah Resources owns the Balama graphite operation in Mozambique, which supplies natural graphite concentrate to the Vidalia graphite processing facility.