Pula’s Tanzania graphite project grains traction

PROJECTS

Pula’s Tanzania graphite project grains traction

L-R: PGP geological team on-site at the Ruangwa: Efraim Hermann, Yusuph Karim and Pula VP Dr Mary Stith

Tanzania hosts world-class graphite deposits and The Pula Group aims to take the lead and social responsibility as project developers.

By Nicolaas Steenkamp

The Pula Group is in the process of developing four tenements in Tanzania, hosting jumbo graphite flake deposits. The exceptional quality of the graphite is expected to make the project attractive despite the current oversupply and lower demand.

With a world-class graphite project in Tanzania, East Africa, US-based The Pula Group is committed to a green future. Graphite is critical to reducing emissions through e-vehicles and other green technology. Graphite is also used to produce graphene, the thinnest, strongest and lightest identified material, which is driving innovation in the health and aerospace sectors.

Along with the high calibre of its Tanzanian graphite opportunity, The Pula Group is setting high ethical standards in the mining sector. The Group’s subsidiary for developing the project is Pula Graphite Partners (PGP), a 50-50 joint venture with local strategic partners. Even during the exploration phase, PGP already has a superior track record of philanthropy, which includes outfitting a youth soccer team, providing emergency food relief for flood victims, and supplying PPE for the health sector in the coastal Ruangwa District, where the four graphite tenements are located.

The high-quality graphite mineralisation includes jumbo flakes developed to a depth of 60 m, a key driver ensuring the project economics are strong. PGP is taking a modular approach to mining and processing graphite – an innovative and efficient approach to optimise the success of the project during the ramp-up phase. The phased plan commences with a mini-plant processing facility that produces 15 000 tonnes of concentrate in the first year.

Using the ‘Mine-in-the-box’ concept developed by South African mining consulting group Bowline Professional Services, the mine can be scaled up with ease to the full capacity of 80 000 tonnes per year. This adaptive approach to mining helps mitigate economic risks and the ‘too big to fail’ attitude that has sunk many large-scale mining projects. The PGP model provides a clear way to reignite the capacity for junior mining companies to activate the sector with minimal risk and maximum benefit to communities.

In addition to the quality of the graphite, business model and corporate ethic, the project logistics also aid in distinguishing PGP. The site is located 220 km from the deep-water port of Mtwara, enabling the concentrate to be transported reliably to meet delivery dates. Reliable power and water are a challenge to remote projects, but PGP has been able to identify innovative solutions. As a long-term sustainable development solution, Pula plans to execute a grid power agreement to deliver a third-party, build-own-operate solution. Water will be extracted from a seasonal river and wells, and stored in environmentally friendly containers. PGP’s motto – ‘doing well, while doing good’ – reflects a deep corporate commitment to mining as a positive engine of change in Africa, and the project builds and enhances infrastructure for local development.

Project history

After careful consideration and studies of high-potential mining investments, The Pula Group identified the graphite deposits in Tanzania as having the highest potential. PGP’s licences are located in an area known to be highly prospective for graphite in the south-east quadrant of Tanzania. The country has a stable, democratic regime and is endowed with abundant natural resources.

In order to further stabilise the mining sector, the Tanzanian government has developed and implemented a fully comprehensive package of mining legislation, which emphasises local beneficiation and industrialisation. Key regulations include the 2010 Mining Act and Regulations, the Tanzania Extractive Industries Transparency Accountability Act 2015, the Finance Act of 2017, and the Mining Commission Guideline for Submission of Local Content Plan 2018.

Tanzania’s deposits are considered among the best in the world and the country is poised to be a global leader in graphite production. This has been confirmed and promoted as part of Pula’s investment and exploration programme,

which commenced in 2015. Site work has entailed surface mapping and a drilling programme to delineate the deposits and generate the initial block models. The NI43-101 compliant ‘Competent Persons Report’ was compiled by Germany-based DMT Kai Batla. The report highlights some of the outstanding features of the project deposits: • an estimated 34.7 million tonnes of indicated resource and 62 million tonnes of inferred resource • at least 11 million tonnes of the indicated resource with 9.5% total graphitic carbon (TGC) and 21 million tonnes of the inferred resource with 8.9% TGC • mineralogical test work indicated 70% of the natural graphite flake sizes ranges between medium and super jumbo – i.e. 300 to 500 microns, which commands US$950 to $1 900 (R15 740 to R31 480) per tonne at the time of writing • net present value (NPV) of ≈$330 million (≈R5.5 billion).

Looking forward

PGP continues to burnish its image as an innovative and committed corporate citizen that can weather shifts in the market.

The Pula Group’s optimism in the graphite market is based on the favourable outlook where graphite is considered critical to the green economy, which is poised to stimulate economic recovery post Covid-19. It is considered a low-cost, non-Chinese-controlled resource of strategic importance. The modular approach is a nimble response to economic and health issues related to scale and the issues (volatility) with oil prices highlight potential demand and subsidies for electric vehicles.

At present, PGP is laying the foundation for the next important project milestone: bulk sampling and testing in order to finalise the processing and flow design for the mini plant to be constructed during Phase 1. In anticipation of an uptick in the economy in Q1 2021, PGP is focusing on securing forward-thinking investment partners, off-take agreements, and the completion of the environmental impact assessment.

In closing

“The current coronavirus crisis aside, the Pula team is very optimistic about the future. The greening of the global economy is the 21st century reality. One example of the forward movement is a proposal by Chuck Schumer of the US Senate to invest $454 billion (R7.52 trillion) to facilitate America’s transition to e-vehicles. This will not only drive demand in the American market; we anticipate that it will accelerate the transition to e-vehicles worldwide. We like how we’re positioned. We look forward to being a lead player in the green revolution,” comments Ambassador Charles Stith, chairman of The Pula Group.

The viability of the PGP graphite opportunity in Tanzania rests on its social licence to operate and the centrality of graphite to the present and future economy. The US and EU have designated graphite as a strategic mineral that is critical to their respective economies and security. PGP aims to develop a new mining model for Africa that links global demand, local beneficiation and national development.

Minerals that aid the greening of the economy, such as graphite, are opportunities to create a more sustainable and ethical mining sector and global future. In that respect, Tanzania is a critical player; its mineral wealth and development needs new standards of resource extraction, which can be provided by young, agile, and ethical companies such as PGP.

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