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Black Rock banks on Tanzania

lack Rock Mining Ltd managing direc- degree of comfort that Tanzania wants the foot wrong in its bid to develop Tanzania’s
Btor John de Vries has welcomed the po- mine and ultimately that means there will first commercial graphite mine.
tential for some Tanzanian “hurt money” to be some clarity on how the free-carried The year started on a positive note
be packaged into the overall financing so- interest legislation of 2017 is going to be when the company signed a non-binding
lution for his company’s Mahenge graphite operationalised.” EPC framework agreement with China
project. Potential financing support from TIB Railway Seventh Group Ltd, one of the
Government-owned parastatal bank came hot on the heels of Black Rock world’s largest construction groups. This
TIB Development Bank Ltd confirmed in entering a strategic alliance and devel- was followed in April by confirmation from
late June it was undertaking due diligence opment MoU with Korean industrial firm the Tanzanian Government that it was ini-
on Mahenge with a view towards providing POSCO Group in early June. tiating formal negotiations on the structure
and arranging a syndicated loan facility for POSCO is also undertaking its own and nature of the 16% free-carried inter-
development of the project, about 370km due diligence on Mahenge and will con- est.
south-west of Dar es Salaam. firm next month whether it intends to pro- While de Vries has been grounded in
Due diligence is expected to take sev- gress to a two-phased binding investment Perth since March due to COVID-19 travel
eral months and a positive decision from agreement with Black Rock. restrictions, he was confident the project NEW DATES ANNOUNCED
TIB at the end of that process would not The first phase would involve POSCO was in good hands with Black Rock’s in-
only be a huge shot in the arm for Black subscribing for up to $US10 million worth country team.
Rock but other resources groups in Tan- of shares or convertible notes in Black “One thing that I think stands in our fa-
zania, some three years after the industry Rock, with funds to be applied to an early vour here is very early on in the ethos of
effectively came to a standstill when the works programme, including completion of the organisation we said ‘this is a mine in
Government enacted widespread chang- all engineering and design, and provision Tanzania that should be run by Tanzania,
es to its mining legislation. of all-weather site access at Mahenge. so let’s build the operating systems in the
“Nobody’s going to touch us, given Phase two will include another invest- organisation that allow that to occur’,” de
where we are in Tanzania, so having some ment of an amount yet to be determined, Vries said.
Tanzanian ‘hurt money’ in the equation is with funds likely to go towards project “We want skilled local management and
fundamentally attractive to debt financ- construction, potentially by way of offtake operators to run this business. It’s always
ing and it’s fundamentally attractive to rights. been our ambition, but ironically it’s con-
the larger end of the sort of equity funds “What we’ve seen is that western con- sistent with the national local content regu-
that we want to be targeting,” de Vries told sumers of lithium-ion batteries in particular lations in Tanzania.
Paydirt. are becoming increasingly very concerned “I think ultimately if you’ve got a 26-year
“These groups want a degree of comfort about the dependency on China,” de Vries mine life you have to play a long game and
that Tanzania is committed to the industry said. “We’ve also seen that there’s an ab- I’d be pretty disappointed in 26 years’ time
and Tanzania is committed to the project, solute limit on synthetic graphite, so that if a bunch of expats are running the asset.”
and the most visible expression of that is leaves natural flake to fill the void. Now entering his fourth year in the hot
being backed by a parastatal. “Ultimately, whichever way you look at seat at Black Rock, de Vries has no doubt
“Where we see this coming together is it, Africa, and Tanzania in particular, has the business is in a far better position than
TIB gives investors – debt and equity – a the cleanest natural flake graphite availa- when he first arrived. However, he insists
ble. So, the attrac- he won’t be one to rest on his laurels.
tion for POSCO in “We’ve seen some classic crash and
Black Rock was burns here in West Perth where people
quality graphite have walked in and said ‘it’s easy, let’s
that hedged their build it and they shall come’ and basically
strategic risk. And done a gold/base metals play that says ‘I
from Black Rock’s can produce a concentrate, fund me and
point of view, it I’ll sort the rest out later’. Well, it turns out
was a chance for that’s not the right approach,” de Vries
us to rebrand our- said.
selves with a west- “So, while it’s fashionable to run around
ern offtake group, and throw bricks at those who have tried
which obviously and didn’t necessarily meet with the suc-
speaks volumes to cess that they anticipated, I think the real
our capacity to at- challenge is to say ‘what have you learnt
tract debt finance.” and how have you incorporated that into
Despite the your business model?’, and there’s very
challenges posed few people who are actually having that
this year by the conversation.”
global COVID-19
pandemic, Black – Michael Washbourne
Rock has not put a
Black Rock managing director John de Vries on site at the
Mahenge graphite project, Tanzania

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