ASX-listed Black Rock Mining has taken a careful and strategic approach to the advancement and development of its “world-class” 100% owned Mahenge graphite project in Tanzania.
Although sitting on a rich and significant resource, the company will introduce its project to market in ‘bite size’ chunks, necessitating less capital to start up and a quick route to first production, says CEO John de Vries.
The investment market may consider a single asset company a financial risk, but De Vries feels differently.
“For Black Rock Mining, owning and focusing on just our single asset will work to our advantage,” he highlights from the start.
“With a world-class asset that we know will deliver massive returns, we would only dilute our attention away from this if we were to seek another project – especially if it were not in the same class as Mahange.”
This article first appeared in Mining Review Africa Issue 7 2018
The project, located about 350 km inland from Dar es Salaam, has a global total JORC resource of 211 Mt, containing nearly 16 Mt of graphite at an average grade of 7.8% TGC (total graphite contained), and includes a high grade proportion of 2,5Mt at 8.6% TGC.
So with all of its focus invested into the development of its single, tier one graphite mine, the company’s intentions to bring the operation on stream is not to over-exploit the mine from the start but introduce the mine and its processing capabilities in smaller, easy-to-replicate modules that can be delivered with internal cash funds which the mine will be generating from a small, Phase 1 start-up.
With just US$90 million, Black Rock Mining can develop its first module – targeted at an ROM of 1 Mtpa to produce 83 000 tpa of graphite.
From there a second module of exactly the same size will be established by 2021 and a third module thereafter – taking total graphite production to between 240 – 250 000 tpa.
“This equates to a +30-year project lifespan – impressive considering we have only explored an evaluated a small portion (one third) of our entire resource,” De Vries notes.
A long lifespan feeds into Black Rock Mining’s long-term views around building a mine in Tanzania.
“Our business is also about contributing towards economic integration into Tanzania and operating for a minimum of 30 years provides sustainability to contribute towards this.
Employing about 650 Tanzania residents (once operational) and working with local contractors further supports this notion as well as working with local institutions to move product to port for export
A proof of concept rail haulage from Ifakara (60 km from Mahenge) to the Port of Dar es Salaam completed recently, demonstrating the viability of Tazara (Tanzanian Zambia Railway Authority) as a logistics partner.
It showcases the excellent infrastructure available to the Tanzanian graphite industry. The shipment comprised over 500 t of sample and drill core destined for testing in Canada.
“This project demonstrates the compelling economics of rail verses road haulage, it also visibly demonstrates how we, as miners can integrate into the broader Tanzania and deliver benefits to the whole of the economy through integration and the use of infrastructure already in place. This is absolutely consistent with government policy,” De Vries states.
Black Rock Mining is currently conducting a definitive feasibility study (DFS) for Mahenge which is currently just more than 65% complete.
Final results of the study are expected in August/September of this year.
Part of this process has seen the company test the quality of its graphite content at a laboratory in Canada which in May revealed excellent results.
A pilot plant constructed specifically to test the Mahenge ore by SGS Lakefield revealed 99%+ graphite concentrate using floatation methods only.
“We are not aware of any deposit that is capable of producing 99.3% grade concentrate by standard flotation alone.
"Being able to generate ultra-high grade product using flotation is of significant value to downstream processors who are increasingly finding environmental constraints impacting their business.
"The value proposition of producing high specification concentrate has been validated by Syrah Resources’ recent announcement of planned increases of Balama concentrate grades to a targeted 97%-98% TGC.”
“Further to this, Black Rock Mining is particularly pleased with the minimal flake degradation during the additional polishing.
"With over 55% of the ultra-grade concentrate reporting to the large and jumbo fraction, this simply underlines how remarkably robust, Mahenge flake really is.”
“With such high quality graphite content, combined with a high percentage of large flakes which is already is a major deficit in China, our avenues to provide product for specialty graphite products are extensive,” De Vries elaborates.
The mining component of the Mahenge project offers its own attractive value which contributes to the low cost economics of the project - $378/t according to the pre-feasibility study which De Vries confirms will make BKT the second lowest cost per ton graphite producer in the world, and also positions it at the top of the margin curve.
The project’s strip ratio at 1.5:1 is significantly lower than other graphite players.
Where to from here?
Following completion of the DFS, Black Rock Mining will “test the financial markets to confirm appetite for the project” and from there move into a front-end engineering and design (FEED) stage which should be completed by January 2019.
At this point the company will raise cash for development and move the project directly into execution phase.
The modular assembly model will minimise the construction timeframe which should take no longer than 12 months and enable Black Rock Mining to produce first graphite concentrate by the end of 2019.
With logistics in the process of being upgraded, Black Rock Mining’s remaining infrastructure requirements to support Mahenge are also in motion.
A DFS has commenced to evaluate the costs to supply power from a diesel-fired power station, however the company is also working with state-owned power utility TANESCO in connecting to the main grid.
A 33 kV line to Mahenge town is currently in upgrade phase.
De Vries confirms there will likely be capacity constraints on the line which the company would have to assist in upgrading further.
Mahenge’s total power consumption requirements are low however and will not exceed 5 MW in total for Phase 1.
The company is also exploring the option to use dry stacking technology for its tailings to help reduce water consumption.
It is also environment-friendly, and simplifies the issue of water management from tailings dams in the rainy season.
De Vries highlights the benefits of this innovative approach: “reduced water consumption, and reduced footprint are great benefits, but the real motivator is the reduced risk profile - no dams to overflow, no dams to fail and simplified residue management will make us best in class in residue management.”
CPC Project Design partners with Black Rock Mining at Mahenge
CPC Project Design (CPC) is proudly supporting Black Rock Mining with the development of their Mahenge graphite project in Tanzania.
Having recently completed the Balama graphite project for Syrah Resources, CPC has established itself as a market leader in the provision of engineering and project development services in the graphite sector.
CPC has assembled an experienced graphite team and is currently undertaking the Mahenge feasibility study and the company looks forward to continuing its close relationship with Black Rock in the development of this exciting project.