Kibaran Resources announced that it has signed a new agreement with German KfW IPEX-Bank for debt funding of the Epanko Graphite Project.


Image: Kibaran graphite project locations in Tanzania. Photo courtesy of Kibaran Resources Limited.

The agreement reappoints KfW IPEX-Bank to arrange senior debt funding for the Epanko Graphite Project in  Tanzania  (“Epanko”  or  the  “Project”)  after  a  hiatus  of  18  months,  during  which  many discussions  have  been  held with  the  Tanzanian  Ministry  of  Minerals,  Mining  Commission  and  the  Bank of Tanzania concerning the regulatory changes introduced in July 2017 that have impacted on mineral project debt financings in the country, and is a reflection of the improved investment outlook in Tanzania.

As recently reported (refer ASX announcement Tanzania and Germany to Forge Closer Economic Relationshipon  26  March  2019)  the mining investment  climate  in  Tanzania  continues  to  improve  and there is increasing confidence among international banks that the remaining regulatory aspects impeding new mine financing arrangements will be satisfactorily resolved.

Epanko is  development ready with the Company having invested over $35 million to date in order to prepare the Project for construction and operation, including:

Completion of  a bankable feasibility study;

  • Exhaustive due  diligence  by  KfW  IPEX-Bank  appointed  Independent  Technical  Engineers  SRK  Consulting  on  all  technical  and  financial  aspects  of  the  Project  as  well  as  social,  environmental  and safety aspects to IFC Performance Standards and World Bank Group Environmental, Health and Safety Guidelines;
  • Sales and  offtake  agreements  for  graphite  production  in  Germany  with  ThyssenKrupp and EGT and in Asia with Japanese group Sojitz Corporation; and
  • Mining Licence and environmental approvals in place.

KfW  IPEX-Bank  and  Kibaran  will  now  proceed  to  complete  lender  credit  review  processes  and  prepare the application for the German Government Untied Loan Guarantee scheme through Euler Hermes AG that supports the proposed senior debt funding package for Epanko.

The Project is forecast to make a substantial positive impact on the Tanzanian economy, with key benefits that include:

US$850  million  in  direct  financial  contributions  over  the  first  20  years  of  operation  through procurement,   employment,   royalties,   taxes,   fees   and   dividends,   generating   an   estimated   additional US$2.5 billion in indirect GDP within Tanzania;

  • Direct employment  of  approximately  300  Tanzanians  (over  95%  of  all  staff),  creating  an  estimated 4,500 indirect jobs through the supply of local goods and services; and
    •   Construction  of  new  community  housing,  school  facilities,  Church  and  medical  dispensarytogether with the provision of social supports such as health insurance and training programs to build lasting local partnerships.

Positive discussions with the Tanzanian Government are continuing and following the recent Barrick Gold  Corporation  announcement  foreshadowing  a  resolution  to  the  Acacia  Mining  dispute all stakeholders  recognise  the  importance  of  moving  quickly fo rward  to  encourage new  mineral  investment in Tanzania.

Kibaran’s  Epanko  Graphite  Project  will  make  a  significant,  inter-generational  social  and  economic  impact  within  Tanzania.  It  supports  Tanzania’s  industrialisation goals  by  facilitating  new  carbon  product  industries  in  the  country  and  builds  on  Germany’s  efforts  to  develop  closer  industrial  links  with Tanzania.

Source: Company Press Release