Regulatory Hurdle Removed but Funding and Trading Suspension Still Key Risks for Black Rock

Regulatory Relief for Mahenge Project

Black Rock Mining Limited (ASX: BKT) announced that the Mining Commission of Tanzania has formally lifted the default notice issued against its Special Mining Licence (SML) for the Mahenge Graphite Project. This notice, part of a broader set of breach notices issued to multiple licence holders, had cast uncertainty over the project’s regulatory standing since mid-April.

The lifting of the default notice signals a significant regulatory green light for Black Rock’s Tanzanian subsidiary, Faru Graphite Corporation Limited, which holds an 84% interest in the project. Importantly, the company confirmed that the terms of the SML remain unchanged and that there are no impediments to ongoing operations, effectively clearing the path for project development to proceed uninterrupted.

Implications for Trading and Project Development

Following the default notice, Black Rock’s shares were suspended from trading under ASX Listing Rule 17.3. The company has since confirmed full compliance with ASX Listing Rule 3.1 and other regulatory requirements, expressing confidence that the suspension will be lifted imminently. This development is likely to restore investor confidence and liquidity in the stock, which has been under pressure due to regulatory uncertainty.

The Mahenge Graphite Project is a world-class asset, boasting one of the largest graphite reserves globally and a robust economic profile. With an estimated initial capital expenditure of US$231 million and projected first quartile operating costs, the project promises attractive returns, including a post-tax internal rate of return of 36%. Black Rock is now construction-ready, pending finalisation of funding arrangements.

Strategic Partnerships and Future Outlook

Black Rock’s strategic alliance with South Korean conglomerate POSCO remains a cornerstone of the project’s development strategy. POSCO’s equity investments totaling US$47.5 million and offtake agreements covering nearly 40% of Module 1 production provide both financial backing and market certainty for Mahenge’s graphite output.

Looking ahead, Black Rock’s collaboration with the Tanzanian government, which holds a 16% free carried interest, underscores the project’s alignment with national development goals. The company’s ability to navigate regulatory challenges and secure key approvals bodes well for advancing Mahenge towards production, potentially positioning it as a critical supplier in the global graphite market.