Black Rock Mining has cleared key regulatory hurdles for POSCO's US$40 million equity injection and secured US$179 million in debt facilities, setting the stage for construction of its Mahenge Graphite Project in Tanzania.
- POSCO's US$40 million equity investment approved by FIRB and Tanzanian FCC
- US$179 million debt facilities cleared by Bank of Tanzania with DBSA, IDC, and CRDB
- Appointment of Ursula Phillips as Non-Executive Director strengthens board expertise
- Construction of Mahenge Project delayed to 2025 with first production expected in 2027
- Environmental and social governance milestones achieved, including ESIA approval
Regulatory Green Light for Major Funding
Black Rock Mining Limited (ASX: BKT) has taken a significant step forward in advancing its Mahenge Graphite Project in Tanzania, securing critical regulatory approvals for a US$40 million equity investment from South Korean steel giant POSCO International Corporation. The approvals from Australia's Foreign Investment Review Board (FIRB) and Tanzania's Fair Competition Commission (FCC) clear the way for POSCO's strategic capital injection, which is tied to a long-term graphite offtake agreement for fines from Module 2 of the project.
In parallel, Black Rock also obtained approval from the Bank of Tanzania for US$179 million in debt facilities arranged with the Development Bank of Southern Africa (DBSA), Industrial Development Corporation of South Africa (IDC), and CRDB Bank. These combined funding sources underpin the company's plan to commence construction of the Mahenge Project in 2025, aiming for first production by 2027.
Strengthening Governance and Project Readiness
Adding to the momentum, Black Rock appointed Ursula Phillips as a Non-Executive Director. Ms Phillips brings over two decades of experience in technology, risk management, and corporate transformation, with senior roles at Tattarang, PepsiCo ANZ, and other major firms. Chairman Richard Crookes highlighted her appointment as a timely boost to the board’s capability as the company transitions from development to construction.
Despite these advances, the company acknowledges a delay in the project timeline due to the extended regulatory approval process. The Final Investment Decision (FID) is pending, and the company is actively exploring alternative financing options, including potential project-level partnerships to reduce equity dilution.
Environmental and Social Governance Progress
Black Rock has also made strides on its Environmental, Social, and Governance (ESG) commitments. The Environmental and Social Impact Assessment (ESIA) for the Idenke Settlement area received approval from Tanzania’s National Environment Management Council and ministerial certification. The Corporate Social Responsibility Plan for 2025 and the Local Content Plan have been endorsed by relevant Tanzanian authorities, reflecting the company’s engagement with local stakeholders.
These ESG milestones are particularly relevant given the project's access to Tanzania's expanding hydroelectric power grid, notably the Julius Nyerere Hydropower Plant, which recently commissioned five turbines adding 1,175 MW to the national grid. This renewable energy source positions Mahenge graphite products among the lowest carbon footprint offerings globally.
Market Context and Financial Position
Graphite prices for Mahenge’s product basket have remained relatively stable over the past year, with larger flake graphite prices improving even as fines prices have declined to a 12-year low. Black Rock reported a cash balance of A$2.1 million at the end of December 2024, with no drawn debt, while continuing to invest in exploration and project development.
The company’s funding facilities remain undrawn pending satisfaction of customary conditions precedent, including equity contributions and regulatory clearances. Black Rock’s management remains confident in securing the necessary capital to advance the project, supported by binding agreements with POSCO and the debt consortium.
Looking Ahead
With regulatory approvals in hand and a strengthened board, Black Rock is poised to move into the construction phase of its Mahenge Graphite Project. However, the timing of the Final Investment Decision and the ability to secure full project funding remain critical variables. The company’s strategic partnership with POSCO and access to low-cost, renewable energy underpin its competitive positioning in the global graphite market.
Bottom Line?
Black Rock’s Mahenge Project is on the cusp of construction, but funding and final approvals will dictate the pace of progress.
Questions in the middle?
- Will Black Rock secure additional partners to reduce equity dilution and accelerate funding?
- How will graphite price fluctuations impact the project's financial viability at first production?
- What are the risks and contingencies surrounding the Final Investment Decision timeline?