Tanzania Mahenge Graphite Project Early Works to Complete by Mid-2026 Ahead of Final Investment Decision

Black Rock Mining Limited (ASX: BKT) has reported that the early works program at the Mahenge Graphite Project in Tanzania’s Ulanga region is nearing completion, with final earthworks and resettlement activities expected to be completed by late Q2 2026.

The early works program is underway to complete the work needed to support a rapid ramp-up of construction once Black Rock is fully funded and reaches a Final Investment Decision (FID).

The company has successfully completed community compensation payments for Project Affected Persons (PAPs) within the Faru John Road corridor, the lower access road that was the final remaining project area requiring community compensation.

The remaining activities to be completed by late Q2 2026 include the relocation of graves located in the road corridor and the construction of the Mdindo stream diversion channel, which will create unrestricted access to the plant site area ahead of the main works program.

The site received over 500mm of rain in March, resulting in difficult conditions for earthworks, which delayed the final activities to the end of the wet season.

The contract for bulk earthworks was awarded in February 2026 to Tanzanian contractor Taifa Mining and Civils Limited through a competitive tender process.

Preliminary work on the Ifakara to Mahenge 220kV transmission line has also been completed, including corridor survey and tower spotting carried out in cooperation with representatives from the Tanzania Electric Supply Company Limited (TANESCO) and a local biodiversity specialist.

The completion of the survey is a key input to the preliminary engineering and Engineering, Procurement and Construction (EPC) contract process, and satisfies conditions precedent for project lenders.

The new 220kV power line will connect Mahenge to competitively priced, high-voltage hydro-dominated power, which will enhance the green credentials of the project’s graphite products by delivering a much lower carbon footprint than most global peers relying on conventional diesel-generated power.

Contract pricing for all early works activities has been validated against the company’s Front End Engineering Design (FEED) completed in 2022, confirming that cost projections remain on track.

Black Rock Managing Director John de Vries commented: “Good progress has been made on delivering the early Works Program since our October Ground Breaking Ceremony. Completion of Early Works is critical for ensuring that Mahenge is construction-ready once we secure full funding and make FID. A major highlight is the successful completion of community compensation for the lower access road. Also pleasing is the completion of preliminary work on the transmission line, which will secure access to clean, hydro-dominated power for Mahenge and the region. Access to competitively priced grid power will significantly increase the cost differentiation of Mahenge relative to peers using conventional diesel-generated power.

The Mahenge Graphite Project

The Mahenge Graphite Project holds a total mineral resource of over 213 million tonnes at 7.8% total graphitic carbon (TGC), containing 16.6 million tonnes of graphite, making it the second-largest graphite reserve globally.

The project’s ore reserves stand at 70.5 million tonnes at 8.5% TGC, containing 6 million tonnes of graphite.

The project is expected to contribute over 400 full-time equivalent (FTE) jobs for its first module, rising to over 900 FTE when all four modules are fully operational, providing a substantial economic boost to the Ulanga region.

Under its Procurement Package Plan, Black Rock estimates that 55% of total project capital expenditures will be spent on Tanzanian content, and 76% will be directed toward Southern Africa Development Community (SADC) content.

Black Rock holds an 84% interest in the project through a Special Mining Licence (SML) granted via a Framework Agreement with the Government of Tanzania, which holds a 16% Free Carried Interest shareholding.

The company has a strategic alliance with POSCO, which includes a US$ 7.5 million equity investment, offtake agreements covering almost 40% of Module 1 volume, and a US$ 10 million prepayment facility.

POSCO approved a further US$ 40 million equity investment in Black Rock and secured the fines offtake for Module 2 in September 2024.

In September 2024, Black Rock also signed a Facilities Agreement for US$ 179 million in facilities with the Development Bank of Southern Africa (DBSA), Industrial Development Corporation (IDC), and CRDB Bank.

Initial capital expenditure for the project is estimated at US$ 231 million, with an adjusted C1 cash cost of US$ 359 per tonne, placing Mahenge in the first quartile on the global cost curve.

The enhanced Definitive Feasibility Study (eDFS) projects an unlevered internal rate of return (IRR) post-tax of 36% and a net present value (NPV10) post-tax of USD 1.4 billion.

Black Rock has undertaken four Environmental and Social Impact Assessments (ESIAs) since 2022 covering the project, access roads, the transmission line, and the Idenke Settlement Area, and has completed a Greenhouse Gas (GHG) assessment covering Scope 1 and Scope 2 emissions across the construction and operation phases.