Australia’s Syrah Resources said on Monday it has agreed with electric-vehicle maker Tesla to extend, for a third time, the deadline to resolve an alleged breach of their graphite supply agreement, underscoring the technical and strategic challenges facing efforts to diversify battery material supply chains away from China.
Under the 2021 offtake agreement, Syrah is to supply Tesla with 8,000 metric tons of natural graphite active anode material annually over four years. The deal is central to the commercial viability of Syrah’s Vidalia facility in Louisiana and to its broader ambition of becoming the first major non-Chinese supplier of anode material to the United States market.
Tesla, headquartered in Texas, issued a notice of default in July 2025, alleging that Syrah had failed to deliver active anode material samples from the Vidalia processing plant that met the carmaker’s technical specifications for use in electric-vehicle batteries. Syrah has consistently disputed that it is in default under the agreement.
The companies have now agreed to push the “cure” deadline to March 16, 2026, subject to approval from the U.S. Department of Energy. The original deadline of September 16 was first extended to November 15, then again to January 16, reflecting the complexity of resolving the dispute and finalising qualification of the material.
“While Syrah does not accept it is in default under the offtake agreement, the parties have extended the cure date to March 16, 2026 and are closely collaborating to cure the alleged default,” the Australian miner said in a statement.
The Vidalia facility occupies a strategically important position in the global battery supply chain. It is currently the only vertically integrated, large-scale producer of natural graphite anode material outside China, which dominates the processing and refining of the metal used in lithium-ion batteries. The plant has also been supported by U.S. government initiatives aimed at strengthening domestic and allied critical-minerals supply.
Despite the extension, Tesla retains the right to terminate the supply agreement if Syrah’s active anode material does not meet its specifications by February 9.
Investor concerns weighed on Syrah’s shares, which fell 6.6% to A$0.285 in early trade on Monday, marking their lowest level since December 22. The broader mining sub-index rose 0.6% over the same period, highlighting the company-specific nature of the sell-off.
