Prime
Deal gives Tanzania’s graphite mining new push
What you need to know:
- The three-year agreement will see Australia’s Evolution Energy supply about 90 percent of fine flake graphite from its Chilalo project in Tanzania to China-based BTR New Material Group Co.
Dar es Salaam. Tanzania’s graphite mining received a new impetus after Australia’s Evolution Energy Minerals signed a supply deal with China-based BTR New Material Goup Co.
Evolution Energy managing director Mr Phil Hoskins said on Wednesday that under the agreement his company will supply BTR fine flake graphite from its Chilalo project in Tanzania.
The company will supply about 90 percent of the product from the project to BTR under the three-year agreement, which can be extended for another three years.
The strategic investment agreement, binding offtake agreement and transformational memorandum of understanding (MoU) for downstream collaboration with BTR, a battery anode producer, are expected, on completion, to position Evolution as a vertically integrated producer of lithium-ion battery anode materials.
BTR will also engage with Evolution on battery anode materials production.
Under the agreement, BTR in return, will acquire a 9.9 percent stake in Evolution for about a $4.9 million ($3.15 million) and support further financing of the Chilalo project in southeast Tanzania.
Mr Hoskins said the agreements made with BTR represent a “transformational opportunity” for the company and provides further validation of the Chilalo project’s quality.
“These transactions provide a clear pathway to funding and accelerate Evolution’s transformation from graphite mine developer to a vertically integrated graphite company,” Mr Hoskins said.
“Leveraging BTR’s world-leading commercially proven technology, innovation and Tier 1 customer base is expected to de-risk the proposed Evolution/BTR downstream collaboration and fast-track Evolution’s exposure to the rapidly growing battery anode market,” he added.
BTR senior vice president, Chen Xiaodong said the company is pleased that Evolution will become BTR’s main overseas natural graphite partner.
“Our close cooperation will not only help our companies achieve further global coverage in production and vertical integration, but also contribute to the innovation of lithium-ion materials and support the development of the global new energy industry,” Xiaodong said.
Evolution Energy is one of the three Australian companies which in April signed with the government of Tanzanian, contracts worth $667 million (about Sh1.6 trillion) to mine for graphite and rare earths.
The framework agreements were part of a push by President Samia Suluhu Hassan to boost the mining sector’s contribution to Tanzania’s economy to at least 10 percent by 2025. Other firms which signed the deals include EcoGraf Ltd and Peak Rare Earths.
Western nations are looking to reduce their dependence on China for rare earths — 17 heavy metals which are crucial for electronics such as smartphones, computers and batteries as well as the cutting-edge technologies that could reduce reliance on fossil fuels.
