The British country, industry and risk analysis business the Economist Intelligence Unit (EIU) has expressed the view that recently concluded long-term purchase agreements between Australian miners and Chinese enterprises have cleared the way for the development of graphite mining operations in Mozambique. The miners concerned are Triton Minerals and Syrah Resources.

The EIU reports that Triton now has sales agreements worth $3.5-billion over the next 30 years, plus $232-million in funding from two Chinese groups, Yichang Xincheng Graphite Company (YXGC) and Shenzhen Qianhai Zhongjin. Syrah Resources has a sales deal with China Aluminium International Engineering Corporation (better known as Chalieco).

Triton is currently developing the Ancuabe, Balama North and Balama South graphite projects in the Cabo Delgado province of Mozambique. It currently holds 60% in each of the three projects. In all cases, it has the option to increase this to 80% once production starts. Ancuabe, the company states, is “[w]orld renowned for jumbo flake”. Balama North contains the Cobra Plains and Nicanda Hill prospects and Triton describes the latter as the “world’s largest flake graphite- vanadium resource”. Balama South will produce jumbo flake graphite. These projects are all still in the exploration stage. Currently, the company’s top priority is the development of the Nicanda Hill prospect in Balama North, with Ancuabe in second place.

“In addition to increasing export earnings and government tax revenues, the [Triton] project could bring wider economic benefits,” notes the EIU. The deal with YXGC includes the setting up of two graphite materials production lines, one of which will be in Mozambique, which will produce flexible graphite sheet, high-value expandable graphite, refined battery-grade graphite and other value-added graphite products. (The other will be in China.) This, affirms the EIU, “will signal that Mozambique has the potential to develop a value-added production chain alongside the extraction of raw materials, which will be vital to ensure that the country’s mineral wealth supports broad development”.

Syrah Resources is developing the Balama project. (The Balama region is highly prospective for graphite and a number of companies, not just Syrah and Triton, have projects in the area, resulting in a number of different projects having ‘Balama’ in their names.) The project involves the development of two pits, East and West. The miner has previously reported that the graphite from Balama is “exceptionally high quality” and that a simple flotation process will produce a concentrate containing more than 97% carbon. “It has very low sulphur content (0.008%) and thus is expected to be in high demand for steel applications which require a low sulphur content.” In addition, the company “expects that Balama could be the lowest-cost producer of graphite in the world (including China). This is mainly due to the superior qualities of the deposit, such as very high grade, soft and thick ore outcropping at surface . . . as well as low costs in Mozambique”.

The EIU states that graphite mining costs are low, in general, in Mozambique. Further, international demand for the mineral has been increasing, while the African country possesses abundant reserves. “If successful,” it stated, “these projects will establish Mozambique as a graphite producer with global expression and, although graphite mining continues to be much more limited in scale than other resources, it will contribute to the diversification of the country’s export base and limit vulnerability to price shocks in the coal industry.”