Tanzanian company Black Rock Mining has signed a non-binding memorandum of understanding agreement (MoU) with POSCO International regarding the graphite concentrate offtake from Module 2 of the Mahenge graphite project in Tanzania.

Under the terms of the agreement, POSCO will secure a long-term offtake of fines graphite from the planned production of Mahenge Module 2.

POSCO will also make an additional equity investment in Black Rock Mining of up to $40m or a stake of 19.99% in the latter (whichever is lower), subject to the approval of POSCO.

Besides, the agreement will explore additional opportunities for both parties to cooperate further to develop an Inflation Reduction Act (IRA) compliant anode supply chain.

Black Rock Mining said that negotiations are ongoing to secure a binding agreement.

The agreement between the companies is expanded on their partnership towards developing the Mahenge graphite project to deliver a significant new source of natural graphite into a highly dependent global market driven by clean energy demand.

Furthermore, the agreement signifies additional derisking of Black Rock Mining’s funding strategy to develop the Tanzanian graphite project.

Black Rock Mining CEO John de Vries said: “We are extremely pleased to be further deepening our relationship with POSCO and we believe today’s announcement represents a strong endorsement of the promising future of the Mahenge Graphite Project.

”POSCO’s confirmed interest in Mahenge Module 2 also represents a major de-risking milestone for the Company, providing increased confidence for all of our stakeholders as well as improved visibility on funding and our pathway to production.”

Located in the Ulanga district, the Mahenge project is estimated to have a four-stage construction schedule to deliver up to 340,000 tonnes per annum of 98.5% graphite concentrate for 26 years.

The project is owned by the Tanzanian joint venture (JV), dubbed Faru Graphite, in which Black Rock Mining has a stake of 84% with the remaining 16% interest held by the Tanzanian government.