Mahenge graphite project lands third offtake deal

Perth-based graphite developer Black Rock Mining has landed a third Chinese offtake deal for production from its Mahenge graphite project in Tanzania.

The latest agreement is with Taihe Soar Supply Chain Management for up to 100,000 t/yr over three years when the project comes into production. The first year will see 37,500t being transported to China from Dar es Salaam, the second year 80,000t and the third year 100,000t.

Black Rock already has offtake agreements with Heilongjiang Bohao — which is taking 30,000t in the first year, 50,000t in the second year and 90,000t in the third year — as well as with Qingdao Fujin, which is taking 15,000 t/yr over three years. The third offtake agreement with Taihe Soar means that 85pc of Mahenge's estimated year three production of 240,000t is contracted to buyers.

Black Rock has also started work on optimising Mahenge's mine plan, with the aim of potentially increasing annual output to 300,000 t/yr from 240,000 t/yr over its 32-year mine life, because of strong demand for various types of graphite.

Mahenge has one of the world's largest flake graphite resources with a JORC-compliant mineral resource of 212mn t grading 7.8pc total graphitic carbon and a reserve of 70mn t grading 8.5pc total graphitic carbon.

"Continued market interest in our large, high-purity premium and ultra-flake products supports our position that the expanded graphite market is supply constrained," Black Rock managing director John de Vries said. "Being able to place the volumes that we have in the expanded graphite market suggests that significantly more demand exists in this sector than many commentators have anticipated."

With offtake agreements in place, the company's major focus for early 2019 is to secure and finalise development funding so that it can meet its project timelines.