Black Rock Mining secures multiple funding investments for Mahenge graphite development

Black Rock Mining (ASX: BKT) has finalised multiple funding investments to advance the development of the Mahenge graphite project in Tanzania.

The company’s strategic alliance partner POSCO International agreed in early September to invest US$40 million via a two-tranche share placement that will increase its stake in Black Rock from 10.1% to 19.99%.

The placement secures long-term fines offtake for Mahenge Module 2, with proceeds to fund the development of Module 1.

Offtake rights

In return for the investment, Black Rock subsidiary and Mahenge owner Faru Graphite will grant POSCO future offtake rights for 100% of planned fines graphite production from Mahenge Module 2 once it is built.

The initial 12-year deal converts a memorandum of understanding signed in September 2023 to a full-form binding agreement and supports a clear path to a qualified commercial market for Black Rock’s high-quality graphite concentrate.

Faru will execute a separate agreement with POSCO, giving it the non-exclusive right to market large-flake graphite from Mahenge to customers located outside of China.

POSCO will be paid a commission on all sales and may also acquire small-flake graphite on commercial terms as the need arises.

Development funding

Also in September, Black Rock and Faru secured US$179m in Mahenge development funding via a facilities agreement with Development Bank of Southern Africa, the Industrial Development Corporation of South Africa and Tanzanian lender CRDB Bank.

It comprises a US$113m construction term loan for Mahenge Module 1 and associated infrastructure, a US$20m revolving credit facility for working capital, a US$20m cost overrun facility, and a US$26m bank guarantee facility.

The agreement signalled the conclusion of the Mahenge debt financing process.

Mining services contract

In July, Faru signed a US$37.9 million mining services contract with Tanzania’s largest locally-owned civil and mining contracting business, Taifa Group.

The initial three-year contract meets the project’s local content requirements and was considered a key de-risking milestone for Black Rock.

It also satisfied one of the conditions precedent for project lenders.

Board appointment

Post-quarter, Black Rock appointed management executive Ursula Phillips as a non-executive director of the board.

Ms Phillips has over 10 years of experience in leadership roles for major organisations in the technology, operations and risk spaces, as well as more than 20 years in complex program management and transformations.

She is co-founder and executive director of Batea Consulting, which provides digital, risk, and cyber capabilities to high-growth companies.

She has also worked for Tattarang (which owns Wyloo Metals and Squadron Energy), PepsiCo and Real Pet Food Company.