Saturday, May 25, 2024

Louisiana graphite plant that supplies EV manufacturers will receive federal and state incentives

by BIZ Magazine

By Victor Skinner | The Center Square contributor

A graphite processing facility in Louisiana will use a $107 million loan from the U.S. Department of Energy to drastically ramp up production to supply the electric vehicle market.

The loan, the first in 10 years through a special Advanced Technology Vehicles Manufacturing loan program, is on top of a series of incentives offered by Louisiana, which includes a significant industrial tax exemption.

Australia-based Syrah Resources, which operates as Syrah Technologies in Louisiana, would be the first company that’s not an automaker to receive an ATVM loan, underscoring the Biden administration’s focus on public support for companies producing critical components for the electric vehicle market, Reuters reports.

“The U.S. is serious about onshoring the battery manufacturing and critical materials supply chains,” Jigar Shah, head of the Energy Department’s Loan Programs Office, told the news service.

Shah contends the U.S. currently has only about 5% of the manufacturing capacity to meet the Biden administration’s goal of shifting half of all vehicle sales in the country to electric by 2030.

Syrah Technologies’ plant in Vidalia processes graphite mined from parent company Syrah Resources’ Balama Graphite Operation in Mozambique to create active anode material used in lithium-ion batteries that supply the electric vehicle market.

The company secured a deal with Louisiana to invest $176 million in the Concordia Parish site to add 180,000 square feet of building and processing spade to the existing 50,000 square-foot facility. The project is expected to retain 19 jobs, create 36 direct new jobs with annual salaries of $69,000, plus benefits, according to a February statement from Gov. John Bel Edwards.

Louisiana Economic Development expects the project to create 52 indirect jobs, for a total of 88 new jobs in Louisiana’s Central Region. The expansion is expected to be completed in mid-2023. Louisiana offered Syrah a competitive incentive package that includes services from LED FastStart, the state’s workforce development program, as well as inclusion in the Industrial Tax Exemption Program and Quality Jobs program for Louisiana employees.

Louisiana’s Tax Exemption Program provides an 80% property tax abatement for an initial term of five years, with the option for renewal for an additional five years at the same rate.

Shaun Verner, Syrah’s managing director, told Reuters the Louisiana facility would create 150 construction jobs and 98 full-time jobs.

“The loan will allow Syrah to … support the rapidly growing EV and battery supply chain in the USA,” he said.

The company announced in December 2021 it inked a deal with Tesla Inc. to supply natural graphite active anode material for batteries.

The Vidalia expansion is expected to increase annual production to 11,250 tons of active anode material, with supplies to Tesla starting in 2024.

Production at the facility is expected to produce enough anodes to build 2.3 million electric vehicles by 2040.

U.S. Energy Secretary Jennifer Granholm has signed off on Syrah’s conditional loan offer, which is now pending final paperwork. Syrah said the loan is expected to close by June, with funds dispersed by September, Reuters reports.

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