(Reuters) -Australia's Syrah Resources said on Wednesday that it has agreed with Tesla to extend the deadline to address an alleged breach of their critical graphite supply agreement, buying the miner precious time to salvage a deal vital to its U.S. expansion.

Elon Musk-led Tesla issued a default notice in July after Syrah allegedly failed to deliver conforming active anode material samples from its Louisiana processing facility for Tesla's EV batteries. The original September 16 deadline has now been pushed to November 15.

"While Syrah does not accept it is in default under the offtake agreement, the parties have extended the cure date to 15 November 2025," the company stated, adding that both sides are collaborating to resolve the dispute.

The 2021 Tesla contract, worth 8,000 tonnes annually for a four-year period, underpins Syrah's Louisiana Vidalia facility and its broader strategy to become America's first major non-Chinese graphite supplier.

The facility represents the only vertically integrated, large-scale anode material producer outside China, helping reduce U.S. dependence on Chinese supplies that currently dominate the market.

The extension offers temporary relief as Syrah battles to establish itself in the strategic battery materials sector amid intensifying U.S.-China trade tensions.

Tesla may terminate the deal if Syrah's Vidalia facility fails to achieve final qualification of its anode material by February 9, 2026.