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Tanzania’s Mahenge Graphite Project To Get USD 40 Million Boost

Black Rock Mining POSCO MOU Mahenge Graphite Project Tanzania

On 1st September 2023, graphite developer Black Rock Mining (ASX: BKT) signed a non-binding Memorandum of Understanding with POSCO International Corporation in relation to the long-term fines offtake of graphite concentrate from Module 2 of the Mahenge Graphite Project in Tanzania.

The Agreement envisages the long-term supply of fines graphite from the planned production of the Mahenge Module 2 in exchange for an additional POSCO investment in Black Rock Mining, subject to POSCO approval, of up to USD 40m or an equity stake of 19.99% (whichever is lower).

Negotiations are underway to secure a binding agreement.

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Commenting on the Agreement, Black Rock Mining CEO, John de Vries, said: “We are extremely pleased to be further deepening our relationship with POSCO and we believe today’s announcement represents a strong endorsement of the promising future of the Mahenge Graphite Project. POSCO’s confirmed interest in Mahenge Module 2 also represents a major de-risking milestone for the Company, providing increased confidence for all of our stakeholders as well as improved visibility on funding and our pathway to production.”

About Black Rock Mining and POSCO

Black Rock Mining is an Australian-based with an 84% interest in the world-class Mahenge Graphite Project located in southern Tanzania.

In June 2020, Black Rock announced a Strategic Alliance with POSCO for the development of Mahenge. This included an equity investment of USD 7.5M followed by an offtake agreement for the fines for Module 1 (32% of volume) plus a USD 10M prepayment facility.

POSCO is a large South Korean steel conglomerate with a large and growing battery materials business.

POSCO’s battery business produces both cathodes and anodes and in 2022 was the world’s largest anode producer outside China.

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Tanzania Graphite

As of 2019, Tanzania’s estimated graphite reserves stand at 18 million tonnes ranking 5th in the world after Turkey, China, Brazil, and Mozambique.

Tanzania’s graphite reserves are being explored and developed by Australia-based graphite developers, namely Magnis Resources (ASX:MNS), Volt Resources (ASX:VRC), EcoGraf (ASX:EGR), Walkabout Resources (ASX:WKT), and Black Rock Mining (ASX:BKT). Production stages have not been reached yet.

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