Posco injects Sh100 billion in major boost to graphite project

Dar es Salaam. Tanzania enhanced its international standing in the global graphite market after its major Mahenge graphite project secured a $40 million (nearly Sh100 billion) equity investment from a Korean trade and energy company, Posco International.
This was on top of the binding offtake and $10 million prepayment agreement signed in May this year by Posco, solidifying the relationship between the two entities and indicating a strong commitment to the Tanzanian graphite sector.
Speaking to The Citizen, Faru Graphite Corporation Ltd CEO Mr Alimiya Osman said the agreement is a catalyst for attracting additional investment, as it will enhance credibility and demonstrate investor confidence in the Mahenge Graphite Project.
Faru Graphite is a joint venture where the Australian company Black Rock Mining owns 84 percent and the government of Tanzania owns 16 percent.
Mr Osman underscored the significance of securing financial support through an equity investment from a globally reputed company such as Posco International. This infusion of capital is poised to make a substantial contribution to the project’s prosperity and expansion within Tanzania.
“The Mahenge Graphite Project has set its sights on commencing operations by the close of 2025, contingent upon the final investment decision (FID),” said Mr Osman.
He emphasised that forging a partnership with a major international player such as Posco International elevates Tanzania’s stature on the global stage, particularly in the critical minerals and resources sector.
According to the summary of average operating costs, the project will require an estimated $466 million over the first ten years of implementation.
In the ASX announcement issued by Black Rock, the chief executive, Mr John de Vries, said the agreement represents a strong endorsement of the promising future of the Mahenge Graphite Project.
“Posco’s confirmed interest in Mahenge Module 2 also represents a major de-risking milestone for the company, providing increased confidence for all of our stakeholders as well as improved visibility on funding and our pathway to production,” he stated.
Mahenge Project in Tanzania hosts a multi-generational graphite resource and is one of the largest Joint Ore Reserve Committee (JORC) Code-compliant flake graphite resources globally, with 212 million tonnes at 7.8 percent of total graphitic carbon (TGC) and a reserve of 70 million tonnes at 8.5 percent of total graphitic carbon (TGC).
Black Rock’s Definitive Feasibility Study for the project considers a four-stage construction schedule to deliver up to 340,000 tonnes per year of 98.5 percent graphite concentrate for 26 years.
Procurement and supply chain professional Mr Humphrey Simba said this agreement is a significant milestone for financing the project and ensuring the expected economic benefits are attained.
“The project is expected to generate significant revenues in the Morogoro Region, being one of its major investors. But also nationwide in terms of tax collections, job opportunities, and businesses,” he said.
Mr Simba said as they continue to secure financial backup, it safeguards the project’s plans to commence in 2025.