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Graphite Investing
POSCO to Invest US$40 Million in Black Rock Mining in Graphite Offtake Deal
Sep. 03, 2024 09:15AM PST
Black Rock will use the proceeds to fund the development of Module 1 of its Tanzania-based Mahenge graphite project.
Isaac74 / iStock
Graphite developer Black Rock Mining (ASX:BKT) shared on Tuesday (September 3) that it will be receiving a US$40 million investment from South Korean steel giant POSCO International (KRX:047050).
The companies have entered several binding agreements, with the investment set to take place in two tranches.
In return for the funds, which will boost POSCO's stake in Black Rock from 10.1 percent to 19.99 percent, Black Rock will grant POSCO long-term fines offtake of graphite concentrate from Module 2 at its Mahenge project.
Located in Tanzania, Mahenge hosts what Black Rock describes as a "multi-generational graphite resource."
The company says the asset has one of the world's largest JORC-compliant flake graphite resources, with 213 million tonnes at 7.8 percent total graphitic carbon, plus reserves of 70 million tonnes at 8.5 percent total graphitic carbon.
Faru Graphite is the owner of Mahenge, and is an 84 percent owned subsidiary of Black Rock.
Black Rock will use the funds from POSCO for the development of Module 1 at Mahenge. POSCO secured an offtake contract for all the graphite fines produced at Module 1 under an agreement signed in May 2023.
“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 (Mahenge),” said John de Vries, CEO of Black Rock.
He added that POSCO's interest in Module 2 is a "major de-risking milestone" for the company.
The companies originally signed a memorandum of understanding for the investment and offtake in September 2023.
Black Rock said the US$40 million injection from POSCO remains subject to regulatory approvals, as well as confirmation that all the funding is in place to build Module 1 at Mahenge.
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Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.
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