The deals for the supply of large flake graphite concentrate to Taihe Soar and Qingdao Yujinxi New Material, bring total binding offtake terms for the first stage of the Mahenge project in Tanzania to 60,000 tonnes per annum, including POSCO's 25,000-30,000tpa of fines allocation.

 

The deals with Taihe Soar and QNNM date back to 2019, and will see the buyers deliver prepayment letters of credit within six months of Mahenge's planned commissioning date.

 

Taihe Solar will take at least 20,000tpa and QNNM 10,000tpa over at least three years.

 

There are an additional 15,000tpa uncontracted, but under buyers' options, as part of 23,000tpa that is uncontracted and still subject to qualification.

 

A large-scale qualification plant in Shandong, China, has commenced generating bulk concentrate product samples for POSCO and selected offtake customers in Europe and Asia, a process that should take around six weeks.

 

Production involves a mix of large flake and fines, with the latter targeting battery anode precursor producers within POSCO's customer supply chain.

 

Initial metallurgical reports have been better than expected.

 

Funding for the plant is being provided as part of POSCO's US$7.5 million investment for a 15% stake in Black Rock, which was finalised in May. A further $20 million is expected in pre-payments.

 

The mill was previously used in Black Rock's 18t pilot plant operation in 2019.

 

Samples have been taken from across the entire Ulanzi orebody, which is expected to supply feed for the first two modules over a decade.

 

With the majority of large flake concentrate from the first planned module subject to binding terms, Black Rock said there was now a level of contractual stability that would be useful in supporting its pursuit of debt finance.

 

Black Rock needs about A$116 million for its first stage development, but ultimately hopes to build four modules producing 350,000tpa from year five.

 

Managing director John de Vries said the company continued to receive strong offtake interest for large flake concentrate, so he was confident module one would be fully contracted before the first sod is turned.

 

Work on Mahenge front-end engineering and design continues, and the 2018 definitive feasibility study is also being updated.

 

Negotiations with Tanzania's government for the nation's free-carried interest are also ongoing.

 

Black Rock started the quarter with $11 million cash.

 

The stock has traded between 5-19.8c over the past year, closing yesterday at 16.2c, valuing Black Rock at $138 million.