How Will Black Rock’s New Power Deals and US Tariffs Reshape Mahenge’s Future?

Power Infrastructure Deal Marks a Regional Milestone

Black Rock Mining Limited has taken a significant step forward in developing its Mahenge Graphite Project in Tanzania by signing two pivotal agreements with the Tanzania Electric Supply Company Limited (TANESCO). These agreements commit Black Rock’s subsidiary, Faru Graphite Corporation, to construct a 220kV power line and substation, which upon completion will be transferred to TANESCO. This infrastructure will connect the entire Mahenge region to competitively priced, hydro-dominated grid power, a move that CEO John de Vries describes as transformational for both the project and local communities.

The estimated cost of this power infrastructure is US$40 million, consistent with prior feasibility studies, and the repayment terms are structured to benefit both parties by accelerating repayments while easing early cash flow pressures on Black Rock. This development not only enhances the project’s competitiveness by reducing energy costs but also bolsters its environmental credentials, leveraging Tanzania’s expanding hydroelectric capacity.

Funding Boost and Regulatory Clarity

In parallel with infrastructure progress, Black Rock secured an increase of US$25 million in its Facilities Agreement with the Development Bank of South Africa, the Industrial Development Corporation of South Africa, and CRDB Bank, raising available funding to US$204 million. This increase, subject to customary conditions, extends the loan tenor and defers the first repayment, providing the company with greater financial flexibility as it advances towards construction.

Regulatory hurdles also eased during the quarter with the lifting of a default notice on the Mahenge Special Mining Licence, which had been issued alongside notices to other Tanzanian miners. The Mining Commission’s confirmation removes a significant operational uncertainty, allowing Black Rock to proceed without impediment and reinforcing the Tanzanian government’s commitment to supporting mining sector investments.

Market Tailwinds from US Tariffs

Post-quarter, Black Rock benefited from a major market development when the US Department of Commerce imposed steep antidumping tariffs on Chinese Active Anode Material imports, effectively raising tariffs to 160%. This regulatory action favors ex-China producers like Black Rock’s strategic partner POSCO, the world’s largest non-Chinese anode producer. As Black Rock is POSCO’s key supplier of natural graphite concentrate, this development enhances the project’s strategic value and market outlook.

The Mahenge project’s graphite prices have remained relatively stable over the past year, with improvements in larger flake graphite prices offsetting declines in fines. Combined with the new power infrastructure and favorable market conditions, Black Rock is well positioned to capitalize on growing demand for low-carbon, high-quality graphite products.

Sustainability and Local Engagement

Black Rock continues to advance its environmental, social, and governance (ESG) commitments, completing renovations at a local primary school and progressing its Water Use Permit application. The recent full commissioning of Tanzania’s 2.1GW Julius Nyerere Hydropower Plant further enhances the green credentials of Mahenge’s graphite by increasing the share of hydroelectric power in the national grid to 60-70%, potentially making its products among the lowest carbon footprint graphite globally.

Despite a modest cash balance of A$2.1 million and no drawn debt at quarter end, the company is actively pursuing additional funding and potential project partners to secure the remaining capital required for construction. Discussions with potential partners are ongoing, though outcomes remain uncertain.