Special Report: Black Rock Mining has signed on its third buyer for the graphite it will produce from its Mahenge mine in Tanzania.

The emerging producer (ASX:BKT) has struck a three-year deal to supply China’s Taihe Soar (Dalian) Supply Chain Management up to 100,000 tonnes per annum by the third year.

“This off-take agreement is significant as having effectively sold out modules 1 and 2, clearly
demonstrates that strong market demand exists for Mahenge’s unique Premium and Ultra products,” managing director John de Vries said.

Taihe Soar is a Dalian-based trading house with an annual turnover of over $US400m.

The company specialises in imports and exports and providing trade credit for smaller entities who would not normally have access to international markets.

This latest deal takes the total graphite to be supplied to customers from the Mahenge project so far to 205,000 tonnes per annum by year three.

The agreements represent about 85 per cent of the proposed steady state annual production of 240,000 tonnes per annum.

Black Rock recently secured the largest off-take deal of any graphite developer, with cornerstone customer Heilongjiang Bohao Graphite Company – one of China’s biggest vertically integrated graphite processors.

The company is on track to deliver first concentrate in 2020 and could produce “industry-leading” graphite of up to 99 per cent concentrate.

Active marketing a must

To be successful in the graphite space requires active marketing across all market segments, Black Rock says.

“This off-take would not have been possible, without access to concentrate from Black Rock’s study staged pilot plant, the largest in the sector,” Mr de Vries said.

“The pilot plant has been fundamental to the success of our marketing strategy.”

Black Rock continues to market the project in China, Korea and Japan and continues to receive significant enquiries with respect to off-take.

“We continue to build momentum through a differentiated marketing strategy, targeting the expanded graphite market,” Mr de Vries said.

“Continued market interest in our large, high purity, Premium and Ultra flake products
supports our position that the expanded graphite market is supply constrained.

“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.”

Funding talks well underway

Black Rock is now working hard to secure funding for the Mahenge project and is in talks with multiple potential financiers.

The company is the only graphite developer with a bankable definitive feasibility study and is construction ready.

The securing of its third offtake agreement has prompted Black Rock to start work on optimising the mine plan.

Black Rock plans to shorten its development schedule and is working on a fourth self-funding module to take proposed annual production to over 300,000 tonnes per annum.

The increase is supported by a significant resource and reserve that currently provides for a 32-year mine life.

The modular approach to project execution allows Black Rock to increase scale and ramp up rates to reflect market demand.


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