Australian resource company Syrah Resources has received 25-year mining licence approval for the Balama Graphite and Vanadium Project from the Mozambique government.

Balama is a 106km² granted prospecting licence located within the Cabo Delgado province in the district of Namuno in northern Mozambique.

The project is approximately 265km by road west of the port town of Pemba.

The mining licence extension covers both graphite and vanadium.

Syrah continues to advance quickly at the project, and conversion of exploration facilities to accommodate construction has begun.

In addition, a significant portion of the mobile fleet for construction and mining has been purchased and is awaiting delivery.

Construction of the Balama project is slated to commence after the wet season ends in April 2014.

Syrah initially submitted a mining licence application in July and after five months, the company received approval from the government.

Meanwhile, the company has been conducting many development activities in parallel to exploration.

This has involved firming up infrastructure requirements, planning mine site layout, identifying suitable sources of plant and equipment and also recruiting employees.

Syrah said it believed that the Balama project would become a mine well before the first hole was drilled

"It is by far the largest graphite deposit in the world as well as being a very sizeable vanadium deposit. It has large zones with extremely high grades of graphite and excellent grades of vanadium," the company said.

"The deposit has zones of extremely coarse flake graphite."

Recently, Syrah raised $35m to progress the project through an institutional equity placement.

Image: Graphite occurs in metamorphic rocks as a result of the reduction of sedimentary carbon compounds during metamorphism. Photo courtesy of US federal government.