Explorer Graphex Mining says new Tanzanian government guidelines give it the green light to export graphite produced from its Chilalo project, a key step as it works to get its hands on a $112m funding package.

These new guidelines dictate how much valued-added mineral processing has to occur inside the country before a commodity can be exported.

For graphite players, the guidelines state that concentrates with grades above 65 per cent total graphitic carbon can be exported after laboratory tests and royalty payments.

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Graphex (ASX:GPX) reckons product from its advanced Chilalo project will be well in excess of 65 per cent, but it was good to get this formal confirmation, says Graphex boss Phil Hoskins.

The Graphex share price over the past 12 months.
The Graphex share price over the past 12 months.

Several regulatory moves by the Tanzania government had created uncertainty for ASX-listed miners active in the east African country.

Resolution of “legislative and regulatory issues in Tanzania” – or jurisdictional risk – is crucial if Graphex is to get its hands on the $112 million funding package with US private investment firm Castlelake announced last year.

This cash could see Chilalo funded through to production, but Graphex must complete a Bankable Feasibility Study (BFS) and resolve these jurisdictional risk issues first.

The company has met with the Ministry of Minerals to discuss issues relating to graphite export, the government free carried interest, bank account arrangements, local content requirements, and the ability for the company to grant security over the project.

Graphex told investors the ministry has undertaken to provide them with a written response to these issues, but based on discussions to date the company was confident that “these issues can be resolved to the satisfaction of Castlelake”.

The company was contacted for further comment.