Dec. 5, 2022 - Tanzanian graphite developer Black Rock Mining Limited (ASX: BKT) (Black Rock or the Company) is pleased to announce that is has signed a non-binding Memorandum of Understanding (MOU) with Tanzania Electric Supply Company Limited (TANESCO) to collaborate on the construction of a 220kV transmission line to the Mahenge Graphite Project, and local towns, including the Ulanga District. 

TANESCO Grid Power Supply MOU 

The enhanced Definitive Feasibility Study (eDFS) for the Mahenge Graphite Project considered grid power connection to support the Company’s aim for a highly differentiated and sustainable operation. An MOU was executed between Black Rock’s Tanzanian subsidiary, Faru Graphite Corporation Limited (Faru), and TANESCO, that aims to build the infrastructure to support reliable, renewable and low-cost grid power. The parties will cooperate to develop a 220kV transmission line from Ifakara to Mahenge, including an associated substation for a distribution network within Ulanga District to supply power in Mahenge town and the Ulanga District at large. 

One of the key differentiating features of the Mahenge Graphite Project will be access to low-cost grid power in Tanzania. Grid power generation in Tanzania currently is sourced from ~40% hydroelectric and ~60% natural gas with the proportion of hydroelectricity forecast to grow. As a result, graphite from Mahenge is forecast to have a very low carbon intensity compared to peers and is likely to have one of the lowest carbon footprints of any graphite project globally. Access to a clean and low-cost power source will also support Project economics by delivering a sustainable and low-cost base that drives a higher margin operation. 

Black Rock is exploring options to bring forward the construction of the power line to align with first production from Module 1. The Company is currently in discussions with several parties to explore funding for the power line infrastructure project with TANESCO in parallel and separate to the Mahenge Graphite Project.

Key terms of the MOU include: 

▪ Identify and conduct the relevant studies and surveys related to implementation of the project; 

▪ Design, finance, construction, commissioning and operation of the project; 

▪ Negotiate and enter into relevant project implement agreements; 

▪ Construction of a 220kV transmission line and associated 220/33kV substations at Ifakara and Mahenge (Ndororo), with the line to start from Ifakara and extend to the Mahenge substation; 

▪ Construction of the relevant 33kV distribution network within Ulanga District to supply power in Mahenge town and Ulanga District at large; 

▪ Construction of the 33kV feeder distribution network from the Mahenge substation to site of the Mahenge graphite project; and 

▪ Any other activity relevant for the implementation of the project

Commenting on the MOU with TANESCO, Black Rock CEO, John de Vries, said: 

“Grid power will provide Mahenge Graphite Project with a massive multiplier effect through: 

– Low-cost sustainable power which should lock in our position in the lowest quartile of the cost curve; 

– Low carbon which will differentiate our product in key consumer markets; and 

– The provision of reliable power for the Ulanga and Mahenge areas, driving the win-win relationship developed under our government Framework Agreement and ratified by the Special Mining Licence. 

This MOU follows recent stakeholder discussions and presentations in Tanzania as part of a whole of Government workshop forum which focused on collaboration to achieve key outcomes for the Mahenge Graphite Mine operation. 

Critically, as we navigate the debt and equity finance process, investors should look at this outcome and gain confidence that Black Rock and Faru are focused on our long-term plan to deliver a world-class, sustainable and responsible graphite project at Mahenge.”