*

Shares plunge 28% to lowest since March 2020

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Stock falls as much as 32% earlier in the day

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Syrah defaults on loans with the United States

(Updates with latest share moves in paragraphs 1 and 3, and

context in paragraphs 6)

Dec 12 (Reuters) -

Shares of Australia's Syrah Resources ( SYAAF ) plunged to a

near five-year low on Thursday after it declared force majeure

at its Balama graphite project in Mozambique due to disruptions

from protests exacerbated by ongoing civil unrest, which also

led the company to default on its U.S.-backed loans.

Its shares were trading 28% lower at A$0.190 as of 0401

GMT, their lowest level since mid-March 2020.

The stock fell as much as 32.1% earlier in the session

to A$0.180, its biggest intraday drop in nearly five years.

The company said that farmer-led protests at the Balama

project began in late September and have been hindering the

movement of people and supplies and disrupting operations.

Force majeure is a clause that allows parties in a contract

to avoid liability for unexpected external circumstances that

prevent them from meeting obligations.

Mozambique has also been rocked by civil unrest after

election results in October, currently being disputed by

opposition parties, which has affected the government's ability

to resolve the protests at Balama, the miner said.

"With conditions continuing to deteriorate across

Mozambique...Syrah is unable to undertake a production campaign

at Balama in the December 2024 quarter that is required to

replenish finished product inventory, and for customer sales,"

it said.

In 2023, Syrah sold 85,000 tonnes of graphite from Balama,

earning $47.7 million in revenue from the project, its only

operational and money-making mine in Mozambique.

The protests have also caused the company to default on its

loans with the U.S. International Development Finance

Corporation (DFC) and the U.S. Department of Energy (DOE).

The DFC has pledged $150 million in loans to help fund

operations at Balama, while the DOE loaned the firm $102 million

in 2022 to expand its facility in Louisiana.

Earlier this week, miner South32 ( SHTLF ) withdrew its

output forecast for its Mozal Aluminium smelter in Mozambique

due to the protests.