Syrah Resources Ltd, an Australian-listed graphite and vanadium prospector, saw its shares skyrocket by as much as 30 percent on Thursday following reports of interest from mining giant Glencore Plc. The speculation has fueled rumors of a potential takeover bid that could value Syrah at up to A$2 billion.
According to the Australian Financial Review, Glencore has made an informal approach to Syrah, signaling its interest in gaining control over the rapidly growing vanadium market. Syrah, which holds rights over the Balama graphite and vanadium deposit in Mozambique, has seen a significant surge in its share price over the last few years.
While Glencore declined to comment on the reports, Syrah confirmed that it has received informal inquiries from various parties regarding potential takeover discussions. The company emphasized that none of these inquiries have led to formal talks thus far.
Analysts predict that the development of vanadium reserves at the Balama mine could add $50-$60 million to the overall project cost but yield around 4,000 tonnes of saleable vanadium, valued at $120 million at current market prices.
Syrah’s stock has experienced a remarkable climb from A$0.17 in January 2012 to a high of A$5.61 on Thursday, eventually closing 28 percent higher at A$5.49. The company’s Balama deposit is estimated to have enough inferred vanadium resources to meet global demand for the next 50 years, making it an attractive prospect for potential investors like Glencore.
As the graphite and vanadium market continues to grow, companies like Syrah Resources are attracting significant attention from industry players looking to capitalize on the demand for key materials in emerging industries like electric vehicles.
