Syrah Resources Ltd., a graphite and vanadium developer, rose to a record in Sydney trading after a report the global commodity trader and metals producer Glencore Plc made an informal takeover approach.
Glencore, run by billionaire Ivan Glasenberg, may be willing to pay as much as A$2 billion ($1.9 billion) for Melbourne-based Syrah, the Australian Financial Review reported today, without saying where it got the information. Syrah gets informal takeover inquiries from time to time, though none “have progressed to formal discussions or resulted in any indicative offers being received,” the company said today in a statement. Francis de Rosa, a Sydney-based spokesman for Glencore, declined to comment.
Buying Syrah would give Glencore control of its Balama project in Africa, which the Australian company says is one of the world’s largest deposits of vanadium, used to strengthen steel and in rechargeable batteries. The metal’s application in renewable energy storage is driving interest in the sector, American Vanadium Corp., owner of the only known U.S. deposit of the metal, said in May.
Shares in Syrah closed up 28 percent at A$5.49, the highest since trading began in 2007. The developer has a market value of A$892 million.
Syrah’s project in Mozambique has a vanadium resource that’s about six times bigger than the world’s largest operating deposit, Glencore’s Rhovan in South Africa, the Australian company said in a May presentation. Balama also contains the world’s largest known graphite deposit, Syrah said in the presentation. Graphite is used in electric cars and electronic devices.
Glencore is keen to exert control over the vanadium market, the Financial Review reported. Syrah, which signed an initial sales accord with a unit of Aluminum Corp. of China in March, has received sales inquiries for vanadium from companies in Japan, South Korea and Europe, according to a company filing last month.