March 26 (Reuters) - The U.S. International Development

Finance Corporation (DFC) has proposed converting part of its

loan into equity in Syrah Resources ( SYAAF ), paving the way for

a strategic stake in the company behind a major Mozambique

graphite mine and a U.S. battery materials plant.

The plan includes restructuring the remaining debt into a

convertible loan note and injecting fresh capital to support

operations at the Balama mine, with the funding expected to

unlock more than five times that amount from private investors

and strengthen Syrah's liquidity.

* The proposed deal would allow DFC to eventually convert

all its outstanding debt into equity, making it a long-term

shareholder in Syrah.

* Balama, one of the world's largest natural graphite

deposits, is a key supplier to U.S. and allied markets.

* The transaction highlights Washington's push to secure

critical minerals supply chains amid rising global competition.

* Syrah Resources ( SYAAF ) also said it would raise about A$104

million ($72.2 million) to fund its graphite operations,

including a cornerstone investment from AustralianSuper, the

country's largest pension fund.

(Reporting by Varun Sahay in Bengaluru)