Emerging graphite producer Triton Minerals (ASX: TON) has received formal approval from the Mozambique Government for the production of up to 60,000 tonnes per annum of graphite concentrate over an initial 25-year term from its Ancuabe project, located in the country’s Cabo Delgado province.
The approval was the final step in the mining concession application and regulatory process, allowing the company to move forward with development of its flagship project.
It also signifies a critical milestone relating to funding negotiations for Ancuabe, and will allow Triton to accelerate discussions with the sponsor bank of nominated engineering, procurement and construction contractor MCC International.
MCC was awarded a contract for construction of the project’s mineral processing facility and infrastructure in September.
Once funding negotiation have been completed, Triton will begin design work, site mobilisation and construction activities.
Managing director Peter Canterbury welcomed the Mozambique Government’s approval.
“Mozambique has a long and proud history of mining, and its regional and national government bodies have been extremely supportive during the permitting process [for Ancuabe], reinforcing that the country is a premier location for mining investment in east Africa,” he said.
Non-binding offtake agreement
The mining concession approval follows Triton’s signing of a project investment, financing and offtake agreement with China’s Qingdao Jinhui Graphite Co Ltd in March.
The non-binding agreement provides the framework for the parties to reach a binding deal within six months.
That deal would include Jinhui’s direct project level investment in Ancuabe of up to 10%; financing support through concessional debt or equipment financing facilities; and technical collaboration on value-added processing for supply of Ancuabe product into China’s flame retardant, refractories and battery materials markets.
The production house would also agree to an offtake of up to 15,000tpa of graphite concentrate from Ancuabe.
To-date, Triton has signed binding offtake agreements for approximately 53% of annual production.
Shandong-based Jinhui is a privately-owned graphite company and one of China’s largest graphite producers, churning out approximately 60,000Mtpa of high purity and value-added graphite products and distributing them to more than 200 enterprises throughout China and more than 10 nations.
“This agreement is a significant endorsement of our project and [shows that] Chinese domestic producers are now actively looking to east Africa to expand and diversify their high purity and large flake supply chains in preparation for the significant growth anticipated in these markets,” Mr Canterbury said.
At midday, shares in Triton were trading 11.36% higher at $0.049.