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BLACK ROC
The countdown to first production graphite min
CK MINING
n begins at one of the highest quality nes in the world
MINING | BLACK ROCK MINING
Of the multitude of metals and minerals set to play a role in the global clean energy transition, graphite continues to be one of the most overlooked by generalist investors across capital markets. Many market observers see graphite’s traditional uses in steel, cement or glass manufacturing, but less are aware of its role as a preferred anode material for the growing battery technology industry. In fact, graphite is the only anode material used in lithium-ion (Li-ion) batteries, which have emerged as the dominant technology powering the electric vehicle (EV) revolution. At this stage, it’s important to differentiate the two types of graphite that are available to the market: Synthetic (produced from coal tar or petroleum) and natural flake graphite (geologically formed and mineable in economic quantities). It is therefore widely accepted that as the global decarbonisation thematic deepens, there will be a significant swing from synthetic blends to natural flake graphite production. This will come at a significant advantage to those in control of large and scalable natural graphite deposits, such as Black Rock Mining and its multi-generational Mahenge Project in Tanzania.
Mahenge is one of the largest
Taking a step back, Black
JORC-compliant flake graphite
Rock’s managing director and
resources globally with 212
CEO John de Vries tells RGN
million tonnes (Mt) at 7.8%
that making a natural flake
total graphitic carbon (TGC),
graphite discovery isn’t the
and a reserve of 70 Mt at 8.5%
difficult part of the process.
TGC; making it the 4th largest
“It conducts and responds
graphite reserve in the world,
incredibly well to several
according to Black Rock.
geophysical methods,” he says.
An enhanced definitive feasibility study in mid-2019
Finding the sweet spot
estimated a total post-tax NPV
“What we’ve found is it’s
of US$1.2 billion for the 26-year
diabolically difficult to
life-of-mine project, with a
commercialise. That’s
four-phase production module
because what you’re trying to
ramping up incrementally to
do is create a specific set of
350,000 tonnes per annum (tpa)
circumstances to create an
in the final phase under the
economic deposit.”
firm’s ‘crawl, walk, run, sprint’ strategy.
Flake size is one of those requirements, de Vries
Over the last four years, Black
explains. The most valuable
Rock has spent time qualifying
form of graphite is large
the resource at Mahenge,
flake, which is used in various
fine-tuning the end product
applications from flame
via a succession of pilot plant
retardants to refractories and
tests and securing vital offtake
aviation. Meanwhile, small
agreements, alongside other
flake (fines) are typically
key project development
utilised in Li-ion batteries,
milestones.
paint, lubricants and pencils.
MINING | BLACK ROCK MINING
“You need enough flake size to add value to your basket, but the problem with large flake is it’s used in a number of different manufacturing processes. These tend to be smaller manufacturing enterprises, so you can’t get a balance sheet that will co-fund you. “Conversely, the fine material goes into steel mills or EVs, where there are big balance sheets that can co-fund you.
The next
So, you’re trying to trade off
challenge
a fines to flake ratio where
for graphite
there’s enough fines to attract
developers is to
someone to sponsor you
match the project’s
and enough flake to make
production rate to
it economic. That becomes
the current market size
quite a challenge.”
without distorting the
B L A C K ROCK MIN I N G AT A G L A N C E
STOCK TICKER: ASX:BKT MARKET CAPITALISATION: US$88.9 million (as of July 01, 2021) aj pricing status quo. Once again, there is a balance to be struck between being big enough to be investable, but small enough to not unbalance the market. “We’re really lucky with Mahenge,” de Vries proclaims. “At the grades we’ve got, we can produce 80-85,000 tpy. It’s got a beautiful flakes to fines ratio [around 60:40], the material is strongly differentiated chemically,
MINING | BLACK ROCK MINING
“We can produce 80-85,000 tonnes per year of graphite from Mahenge in the first phase. It’s got a beautiful flakes to fines ratio [around 60:40], the material is strongly differentiated chemically and that is evidenced by POSCO coming on board as a cornerstone offtaker and investor” John de Vries, Black Rock Mining managing director and CEO
and that is evidenced by
This investment is being
The fines from Mahenge’s
POSCO coming on board as
used to support the front-
first phase of production will
a cornerstone offtaker and
end development of the
support POSCO’s recently
investor.”
Mahenge project as Black Rock
stated ambition to become a
prepares to commence the
global leader in the battery
construction phase before the
materials sector within a
end of the year. In addition,
decade, with a particular
A strategic alliance with
POSCO has agreed to provide
focus on graphite-based anode
Korean steel-making giant
a pre-payment facility for
production.
POSCO was first announced in
project financing and will
June 2020, before Black Rock
purchase 100% of the graphite
“We are actually the only
sealed a US$7.5 million equity
fines concentrate from the
graphite developer with a
investment in January 2021,
first phase in an offtake
Western anode producer
giving POSCO a 15% stake in
arrangement.
on board as a cornerstone
Partnering with POSCO
the company.
investor, and we’re still preconstruction. I think that talks
MINING | BLACK ROCK MINING
JOHN DE VRIES, BLACK ROCK MINING CEO AND MANAGING DIRECTOR
a lot about the quality of the
circumstances, according to
chemically pure. We have
chemistry we have at Mahenge
de Vries. Usually, graphite ore
a very low footprint from a
and the amount of work we’ve
contains fluid migration which
refining point of view.”
put in through our pilot plants
creates intercalations and the
and studies.”
subsequent need to refine the
Black Rock also has access to
material for battery materials
hydroelectric grid power and
production.
a railway line will transfer
While the graphite produced from Mahenge has a
its product to market; both
diversified product mix with
“[Refining the product] creates
of which provide low-carbon
a perfect blend of flake and
a porous and weak flake.
alternatives to traditional
fine material, the project’s
Mahenge’s got a solid flake and
fossil fuel-based power and
green credentials provide an
effectively all we need to do is
transport options.
additional layer of attraction,
remove the intercalation off
particularly to the modern-day
the top of the massive flake.
ESG investor.
So that’s got value
Greener graphite Mahenge’s green credentials come back to its unique geological
in terms of being
MINING | BLACK ROCK MINING
Staying within the ESG
“We’ve got a long mine life
By the same token, any mine
thematic, Black Rock had
and we really do want to be
developer should fully mitigate
its Resettlement Action Plan
there for a long time, and on
any adverse impacts on the
(RAP) – relating to four villages
a personal level I’d like to be
local population and its access
in close proximity to the
leaving a positive legacy. That
to natural resources such as
Mahenge project - completed
means you’ve got to work with
water, which is regularly a
and approved in September
your community and they
last year. This was a crucial
must feel they are gaining
milestone not just for the
some benefit
smooth development of the
from you being
project, but also from a social
there.”
licence to operate point of view.
bone of contention in other mining jurisdictions globally. In the case of Mahenge, Black Rock has been able to design a dry stack operation as opposed to a wet tailings dam, which means the company won’t be competing with local subsistence farmers for precious water resources. “Getting those [social aspects] right has been a major milestone and certainly our people in Tanzania have done a fantastic job of being able to
However, de Vries is confident
says to our community, our
do that while we’ve not been
that the mining industry is
shareholders and the graphite
able to be on the ground there
now back on track in the
industry in general that
to supervise it,” says de Vries.
country just as Black Rock is
we’re in a position of gaining
entering the final stages of the
confidence that we’ll soon be
project development timeline
doing what we planned to do,
Black Rock’s chief reflects on a
at Mahenge. “We’re certainly
which is operating a mine on
tumultuous period in-country
seeing some good will coming
the hill.”
since the Tanzanian mining
out of the people we’re
code was revised in 2017.
working with in the Tanzanian
The next big milestone
This upheaval in the sector
government to want to make
for the project would be a
was then exacerbated by the
this happen.
confirmation of the long-
Staying on track
emergence of the COVID-19
standing free carried
pandemic and the unexpected
“Starting to front-end load
interest agreement with the
death of Tanzania’s President
our development programme
Government of Tanzania.
John Magufuli earlier this year.
and push through our RAP
Once this is completed, de
MINING | BLACK ROCK MINING
Vries believes Black Rock can
Mahenge’s first phase
year-after-year and pick up a
quickly step into a finance
production rate of 83,000 tpa
decent portion of that market
process with a view to
will come in at around 7.5%
growth.
commissioning the first phase
of the total graphite market
of the project towards the end
of about 1.3 million tpa. By
“Now we’ve qualified
of the 2022.
Black Rock’s estimations, this
Mahenge, all we need to
entrance will not induce a
do is put in additional
With first graphite production
price-based response from
modules. We don’t need that
from the Mahenge project
existing producers, meaning
extensive ramp-up period of
potentially just over a year
the firm’s price gets validated.
qualification. The strategy is
from now, Black Rock is
simply; produce more of the
planning a sensible entry
“But at the projected
same material into the market
to the market under the
growth rates we’re seeing
that already knows what we
aforementioned crawl, walk,
in the market, we’re able to
are capable of producing.”
run, sprint strategy.
effectively drop another 85,000 tpy module on the ground
Published by Anderson Murray Media Ltd
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