The Syrah Resources Ltd (ASX: SYR) share price is charging higher on Friday.
In morning trade, the graphite producer's shares are up a sizeable 6% to $1.40.
This means the Syrah share price is now up almost 17% this week.
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Why is the Syrah share price storming higher?
The catalyst for the rise in the Syrah share price today has been the announcement of an agreement with a major automaker.
According to the release, Syrah has entered into a non-binding memorandum of understanding (MOU) with Ford Motor Company and SK On.
This MOU will evaluate a strategic arrangement that includes natural graphite active anode material (AAM) supply to the BlueOval SK joint venture from Syrah's vertically integrated Vidalia AAM facility in Louisiana, United States.
Syrah is developing the Vidalia operation as a vertically integrated natural graphite AAM supply alternative for US battery supply chains with construction of a 11.25ktpa AAM facility. It is expected to be completed in the June 2023 quarter and is aiming to commence production in the September 2023 quarter.
What is the BlueOval SK joint venture?
The BlueOval SK joint venture is developing large-scale battery manufacturing facilities in Tennessee and Kentucky in the United States. This is with the aim of supplying lithium-ion batteries for Ford's electric vehicle programs, including for a future full-size electric vehicle pickup truck.
Under the MOU, Syrah, Ford and SK On will continue testing and qualifying Vidalia's AAM. The parties will then use commercially reasonable efforts to finalise a binding offtake agreement no later than 31 December 2022.
This offtake agreement will be between Syrah and the BlueOval SK joint venture for AAM from an expanded production facility at Vidalia and with an offtake commencement date of no later than 2028.
