PERTH (miningweekly.com) – Graphite developer Black Rock Mining has signed its third offtake agreement over its Mahenge graphite project, in Tanzania.

Under the agreement with trading house Taihe Soar Supply Chain Management, Black Rock will supply up to 100 000 t/y of graphite concentrate over a three-year period.

Black Rock is expected to supply Taihe Soar with 37 500 t in the first year of operations, increasing to 80 000 t in the second year, and to 100 000 t in the third year of operations.

Combined with the existing offtake agreements with Heilongjiang Bohao and Qingdao Fujin, the offtake agreement with Taihe Soar represented some 85% of the proposed steady-state annual production of 240 000 t/y from Mahenge.

“This offtake agreement is significant as, having effectively sold out modules 1 and 2, [it] clearly demonstrates that strong market demand exists for Mahenge’s unique premium and ultraproducts,” said Black Rock CEO John de Vries.

“This agreement opens a third sales channel to us through the use of a distributor model to access smaller volume consumers that would normally not have access to international markets.”

De Vries noted that Taihe Soar’s capacity to deploy over $200-million on trading assets, and turn over more than $400-million a year, positioned Black Rock with a strong financial partner with the necessary skills to manage smaller entities not normally available to African developers.

“We continue to build momentum through a differentiated marketing strategy, targeting the expanded graphite market. Continued market interest in our large, high-purity premium and ultraflake products supports our position that the expanded graphite market is supply constrained.

“Being able to place the volumes that we have in the expanded graphite market suggests that significantly more demand exits in this sector than many commentators have anticipated. We will continue to explore further opportunities in the expanded market and understand how these opportunities translate into increased ramp-up rates and additional capacity.”

De Vries said that, as a result of the three offtake agreements, Black Rock had started work to optimise its mine plan by compressing the development schedule and working on a fourth self-funding module to take proposed production from the current planned rate of 250 000 t/y to over 300 000 t/y over the planned 32-year mine life.