Tanzanian graphite developer Black Rock Mining signed several binding agreements with its strategic alliance partner, POSCO International Corporation (POSCO), in relation to POSCO investing US$40 million in Black Rock.

In exchange, Faru Graphite Corporation Limited (Faru) (the 84% subsidiary of Black Rock and owner of the Mahenge Graphite Project will grant POSCO the long-term fines offtake of graphite concentrate from Module 2.

Under the Agreements POSCO will invest US$40 million in Black Rock with the proceeds to be used to fund the development of Mahenge Module 1, from which POSCO has already secured the offtake contract for all the fines graphite produced. In return for the investment, Faru will grant POSCO the future offtake rights for the fines graphite production of Mahenge Module 2, when built.

The binding subscription agreement for POSCO’s US$40-million equity investment remains subject to conditions precedent including FIRB approval, approval from the Fair Competition Commission of Tanzania and shareholder approvals as well as confirmation all necessary funding to build Mahenge Module 1 is in place.

The agreements build on the strategic partnership between Black Rock and POSCO which is working towards developing the Mahenge Graphite Project to provide a significant new source of natural graphite into a highly dependent global market driven by clean energy demand. Importantly, the agreements also signals further de-risking of the company’s funding strategy to develop Mahenge.

The United States, a member of the Minerals Security Partnership (MSP), welcomed the new deal finalized between POSCO and Black Rock that advances cooperation on further developing the natural graphite supply chain by supporting the development of the Mahenge graphite mine in Tanzania.

This milestone agreement, forged in close collaboration with the 15 MSP partners, significantly increases the global supply of natural graphite, which is used in lithium-ion batteries for electric vehicles, solar panels, and more. This project will strengthen and diversify global supply chains for graphite across several markets, according to a statement issued by the US Department of State.