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Contract underpins ‘ongoing commitment’ to developing services

IN IT FOR LONG HAUL
Integrated logistical solutions provider Grindrod will truck graphite concentrate product the 490 km from the Balama mine site to the Port of Nacala, in Mozambique

IN IT FOR LONG HAUL Integrated logistical solutions provider Grindrod will truck graphite concentrate product the 490 km from the Balama mine site to the Port of Nacala, in Mozambique

Photo by Bloomberg

9th June 2017

     

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Integrated logistical solutions provider Grindrod Mauritius believes it is well positioned to assist with logistics services for the Balama graphite project, in Mozambique, owing to its long operational history in the country with regard to land transport coordination, agency services and port operations.

The mine is owned by Australia-based industrial minerals and technology company Syrah Resources’ wholly owned subsidiary, Syrah Resources & Trading Operation.

Represented by subsidiaries, joint ventures and associated companies in 37 countries worldwide, South Africa-based Grindrod was awarded Syrah’s graphite distribution and logistics services supply contract in April. The company has significant investment and operational capabilities in the ports of Maputo and Nacala, in Mozambique, through which it delivers pit-to-port logistics solutions.

“Grindrod has had long-standing business relationships in Mozambique and the securing of this contract underpins the company’s ongoing commitment to developing services in the country. Our integrated logistics offering brings many advantages to Syrah and, in turn, its customers. We are extremely excited to have concluded this agreement and we look forward to a successful partnership with Syrah on this project,” says Grindrod business development executive Walter Grindrod.

Syrah’s flagship Balama project hosts the largest graphite ore reserves in the world with an ore reserve of 114.5-million tons at 16.6% total graphitic carbon (TGC) for 18.6-million tons of contained graphite. The 110 km2 mining concession is located within the Cabo Delgado province, in the district of Balama, in northern Mozambique – about 260 km by road west of Pemba. The Port of Nacala, the deepest port in Southern Africa, is about 490 km by road south-east of the project.

A feasibility study completed in 2015 confirmed that the Balama project will be a first-quartile producer, owing to its high-grade openpit operation, which has an extremely low stripping ratio. The processing plant will have a feed rate of two-million tons each year and, based on an average head grade of about 19% TGC over the first ten years of operations, 356 000 t/y of graphite concentrate will be produced. This production profile will make Balama the largest producer of graphite globally and ideally position it to meet the anticipated increase in demand from lithium-ion battery applications, as well as servicing traditional graphite markets.

Key regulatory approvals have been secured, including water, environmental and land-access licences. As of April, Syrah was focused on progressing project development activities for Balama, with commissioning scheduled to take place in the second quarter of this year and first production and ramp-up starting in the third quarter.

“The finalisation of this contract represents a very significant milestone for Syrah . . . We are very pleased to be working with a world-class and highly experienced Africa-based organisation like Grindrod which will also be providing significant employment opportunities in Mozambique as part of this contract,” says Syrah MD and CEO Shaun Verner.

The contract with Grindrod has an initial term of five years with the option for Syrah to extend for two further five-year periods. Key elements of the agreement include the provision of long-haul trucking services for graphite concentrate product from the Balama mine site to the Port of Nacala. Syrah will load Grindrod’s trucks with graphite concentrate packed into 1 t bags at Balama for delivery to a purpose-built cross dock facility (CDF) near the Port of Nacala. The contract has been structured to allow for the number of trucks to be progressively increased in line with ramp-up of production at Balama.

Grindrod will be sourcing new trucks for this contract. The trucking fleet will feature trucks in B-Double configuration with a maximum payload of 36 t, in compliance with Mozambique road legislation. At peak capacity, 64 trucks will operate during day shifts, in accordance with fatigue management regulations, and the trucks will be monitored by global positioning system tracking systems. A round trip – from the mine to the port and back – will take about two days, which will comprise about 22 hours of driving and required rest periods.

Grindrod will also be responsible for the construction and operation of the purpose-built CDF about 4.7 km from the Port of Nacala. The CDF will facilitate product storage and shipment containerisation and is expected to be operational by the second quarter of 2018. It will be for the exclusive use of Syrah over the term of the contract. The companies are developing interim logistics and distribution services and arrangements for the production ramp-up period prior to the completion of the CDF’s construction.

Once the CDF is completed, Grindrod will unload the trucks at the CDF for direct cross docking and packing of graphite concentrate bags into shipping containers. The CDF is designed to hold 500 filled and 1 500 empty twenty-foot equivalent units on site.

In addition, Grindrod will provide short-haul trucking services of containerised graphite concentrate product from the CDF to the Port of Nacala, as well as the customs clearing and forwarding services associated with the export of containerised graphite concentrate product from Mozambique.

The Grindrod contract becomes effective following the satisfaction or waiver of the customary conditions precedent, including the delivery of parent guarantees and contract security arrangements, the receipt of relevant key permits and approvals, the confirmation of land tenure arrangements and the finalisation of arrangements with the operators of the Port of Nacala.

Edited by Tracy Hancock
Creamer Media Contributing Editor

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