Black Rock Mining (ASX: BKT) has achieved a significant milestone with its Mahenge Graphite Project in Tanzania, signing two key agreements with the Tanzania Electric Supply Company Limited (TANESCO). The agreements, executed through Black Rock’s 84%-owned subsidiary, Faru Graphite Corporation, pave the way for a new 220kV power line to connect Mahenge to competitively priced, hydro-dominated grid power. The Implementation Agreement stipulates that Faru will construct the power line and substation, transferring ownership to TANESCO upon completion, for an estimated US$40 million, consistent with the project’s eDFS Update. The Power Supply Agreement (PSA) allows Faru to recoup the capital cost from TANESCO over the first four years of mine production via a repayment schedule, offering accelerated cash flow for Faru and reduced interest payments for TANESCO.
This development is poised to transform the Mahenge region, fostering new business opportunities and expanding TANESCO’s reach. Access to hydro-dominated grid power enhances the green credentials of Mahenge’s graphite products, reducing the carbon footprint significantly compared to global peers. Black Rock CEO, John de Vries, emphasized the importance of grid power for Mahenge’s global competitiveness and highlighted the public-private partnership model as a driver of national development benefits.
The signing of these agreements satisfies critical conditions precedent for project lenders, de-risking the Mahenge Graphite Project. The power line construction is slated to be funded by the US$179 million Facilities Agreement, contingent on customary conditions, including equity contribution and implementation of technical, environmental, and social actions. The Mahenge Graphite Project boasts a Tier 1 scale resource of over 200 million tonnes and an adjusted C1 cash cost of US$359/t, placing it in the first quartile on the global cost curve. Black Rock has secured agreements with POSCO, including a US$40 million equity investment and offtake agreements for Mahenge Modules 1 and 2.
