Tanzania poised to enter booming graphite market with Bunyu project launch
What you need to know:
- While Bunyu gears up for production, Walkabout Resources' Lindi Jumbo Mine marked another milestone with its first shipment of on-specification graphite concentrate destined for Europe on June 7, 2024
Dar es Salaam. Tanzania's mining industry is on the cusp of a transformation, with two significant graphite projects poised for production.
On June 7, 2024, good news struck Tanzania's graphite sector twice.
The long-awaited Bunyu Graphite Project finally received the green light to begin production, while Walkabout Resources, an Australian firm, announced the successful shipment of its first batch of graphite concentrates from the Lindi Jumbo Graphite Mine.
The shipment as reported on June 7, 2024, destined for Europe, marks a crucial milestone for the project during its commissioning phase.
Walkabout’s Managing Director and CEO, Mr Andrew Cunningham, highlighted the significance of the achievement.
“To achieve our first concentrated shipment from the site, at a time when customers are looking to shore up their graphite supply chains, is a rewarding and outstanding outcome,” he said.
The development comes amid increasing concerns over supply security following the United States imposition of a 25 percent tariff on Chinese natural graphite and China's export restrictions.
After this announcement, The Citizen tried to reach out by phone to the authorities responsible for minerals in the country, including the ministry itself and the mining commission, but without success.
However, a source from within the authorities, who did not want to be disclosed as they were not the spokesperson, admitted to being aware of the graphite concentrate shipment information.
The news about the Lindi Jumbo mine’s entry into the market comes at a time when there is a widening gap between Chinese domestic and international prices.
The first consignment of bagged graphite concentrate was shipped to Dar es Salaam for sale to Wogen under an exclusive off-take agreement.
The sale forms part of a larger order from an end customer in Europe, according to Mr Cunningham.
“We now have the opportunity to engage with more end-users as we continue to demonstrate we have a viable product and that we are serious contenders in the development of non-Chinese graphite supply,” he further noted.
The Bunyu Project
The Bunyu Graphite Project is finally poised to begin production after nearly a decade of waiting, according to the deputy minister for minerals, Dr Stephen Kiruswa.
The landmark development promises to place Tanzania on the global map as a key player in the graphite market, a critical mineral for climate change mitigation technologies.
During a parliamentary session on June 7, 2024, Dr Kiruswa, announced that the long-delayed Bunyu Graphite Project, located in the Ndanda constituency, is now set to commence operations.
This announcement came in response to a query from Cecil Mwambe, the Member of Parliament for Ndanda (CCM), who sought clarity on the government's strategy to implement the project that has been in discussions since 2016.
He said the Ministry of Minerals had issued two mining licenses to Volt Graphite Tanzania Limited to conduct mining activities in the Bunyu Project.
Although the project faced delays due to pending agreements between the company and buyers, he noted, the discussions have reached a promising stage.
“The investor has signed a contract with Property Matrix Limited for a compensation assessment for residents in the project area," Dr Kiruswa stated.
The Bunyu Graphite Project, wholly owned by Volt Resources, stands as one of the largest graphite deposits globally, with an estimated resource of 461 million tons at 4.9 percent Total Graphitic Carbon (TGC), translating to 22.6 million tons of contained graphite.
The project's location in Tanzania, East Africa, benefits from proximity to critical infrastructure, including sealed roads and the deep-water port of Mtwara, just 140 kilometres away.
Special seats lawmaker-CCM, Ms Agnes Hokororo inquired about the specific timeline for the project’s commencement and the benefits for the local villages.
Responding to this, Dr Kiruswa emphasised the international interest in the project. "Investors from the United States and Europe are in the final stages of negotiations. The buyers for these essential minerals, crucial for the production of batteries and electric vehicle components, have been found. This will enable the construction of a value-addition factory to begin soon."
The project is set to be developed in two stages. Stage 1 will produce 23,600 tons per annum (tpa) of flake graphite at a 6.26 percent TGC feed grade, while Stage 2 aims to expand production to 170,000 tpa.
The project's enormous potential is further underscored by the fact that exploration to date covers less than 6 percent of the total project area, according to reports.
Global demand for natural graphite is soaring, driven primarily by its use in lithium-ion batteries for electric vehicles. Alternative anode materials remain significantly more expensive and less developed.
Currently, China dominates the global graphite market, producing 75 percent of the world’s supply and imposing hefty export duties and VAT, thus driving up prices. Thus, heightening the strategic importance of new sources like Tanzania’s Bunyu Project.
The Bunyu and Lindi Jumbo projects signify a transformative era for Tanzania's mining industry. As these projects advance, they are expected to bring substantial economic benefits to local communities through job creation and infrastructure development.
The government's proactive measures and investor interest underscore Tanzania's potential to become a global hub for graphite production, contributing significantly to the global fight against climate change.
The Bunyu Project, in particular, holds promise not only for its vast mineral reserves but also for its strategic importance in diversifying the global supply chain away from China.
With production on the horizon, experts see Tanzania making a remarkable impact on the global mineral industry, positioning itself as a vital player in the transition to greener technologies.
