In November 2017 ASX-listed Black Rock Mining decided to reactivate its definitive feasibility study (DFS) for its flagship Mahenge Graphite Project in Tanzania – the fourth largest contained graphite resource in the world. The decision to reactivate the DFS was based on the company’s growing confidence in the prospect of a resolution to Tanzania’s recent travails in the mining sector, as it attempts to amend its mining code. For Black Rock, the resumption of its DFS has prompted a barrage of movement at the Mahenge development, including the commencement of a drilling campaign and a bulk sampling programme, which has now been shipped to Canada in preparation for a second pilot plant run. Meanwhile, vital environmental and social impact assessments have been initiated along with the resettlement framework development.
“We reactivated the DFS and commenced drilling with the objective to complete the metallurgical drill out and extract a bulk sample before the wet season broke, which we achieved, on schedule and on budget” says chief executive officer John de Vries.
The DFS will deliver a precise engineering study that will help the company raise finance for the project, and de Vries is convinced that it is in safe hands after handing CPC Engineering the contract for the study.
CPC is a supremely experienced outfit within the mining services industry and also holds the engineering contract for the comparable Balama graphite project in Mozambique, which is being advanced by Syrah Resources.
“With CPC on board, we have got what we think is the most current graphite CV on the planet and the experience needed to translate that CV into meaningful action on the ground.”
The drill programme took place over December and January and was conducted by a local group called MRCM Drilling, who were able to complete the exercise before the onset of the wet season, which was a major boon to Black Rock.
The upcoming second pilot plant run will use samples taken from the December and January campaign and aims to validate the design and vendor equipment, stress test the plant and ensure Black Rock fully understands variability and can deliver at customer specification at all times.
A world first result
Meanwhile, the company also recently announced some astonishing processing results from the preceding pilot plant run, as the company delivered a world first 99%+ purity graphite concentrate in a conventional flotation circuit at scale.
“We took 200 kg of concentrate and re-processed it through an additional polishing stage within a closed circuit operation and from that we were able to upgrade the concentrate from a purity grading from 97.5% to 99.5% with zero loss of graphite.”
This result pushes the processed concentrate into the ultra grade bracket (99%), up from the premium grade (97.5%), and allows Black Rock to conduct meaningful discussions with potential customers having qualified its product in the pilot study.
In addition to the industry-leading purity grade achieved in the pilot, de Vries is also pleased with the minimal flake degradation that occurred during the additional polishing, with 55% of the ultra grade concentrate remaining in the large or jumbo size fraction.
The pilot plant was conducted at the Lakefield laboratory in Canada by SGS – the best in-class product certification company according to de Vries – which adds another layer of credibility to the results and an extra degree of clarity to discussions with customers in need of a regular, premium or ultra grade concentrate.
After the success of the first pilot plant run, Black Rock is on track to proceed with the second pilot plant in Q3, which is going to be even more revealing as it incorporates a design laid out in the DFS.
“The second pilot plant is going test and validate critical elements of that design before we build it. We want to go modular in the field, which means we need a high degree of confidence the things are going to work when we turn it on.”
The long-term fate of Mahenge project is dependent on the success of the first module, as the cash flow generated from that phase will contribute towards the construction of the following two phases under the crawl, walk, run strategy. Therefore, validation of the design through the second pilot plant study is essential.
“The second pilot plant also lets us take meaningful volumes of material to various vendors for testing and we can come back at that point with performance warranties from the vendors. It’s a pragmatic commercial strategy as well.”
Working with Tanzania
Furthermore, the miner has commenced environmental and social risk assessments which form a vital part of the mining license application to the Tanzanian government, which is proving to be a delicate matter.
The company’s CEO admits that the recent shift in the stance of the authorities towards foreign mining firms has added further difficulty to the application process, but de Vries remains confident that the licence is still well within reach.
Black Rock is one of the first companies that will comply with new mining bills that were signed into law by President John Magufuli last year. The laws require the government to own at least a 16% stake in mining projects.
“Let’s look at what government’s objectives are from the license and see if we can work together to deliver that,” he proposes.
“It’s about transparency. If you can be transparent, clear and articulate in what you are trying to achieve and find a way to enshrine that into a code of practise, I think that’s good for everybody and that is what we are trying to do.”
In order to demonstrate the company’s willingness to work closely with the Tanzanian authorities and integrate into existing state structures, Black Rock chose to ship the 530 tonnes bulk sample of concentrate via rail from Ifakara to the port of Dar es Salaam, ahead of its export to Canada.
“That’s a very clear demonstration of our intention to engage with Tanzania, our intention to learn how to do things, and also to roll our sleeves up and get on with the job. If we are creating jobs, engaging with the existing systems, and not trying to duplicate or usurp anybody’s rights or obligations, it’s not a bad position to work from.”
The tipping point
The growing electric vehicle (EV) industry is an area of significant interest for Black Rock due to the fact that every KWh battery used to power EVs requires 1 kg of spheronised graphite. In recent months, de Vries has observed a growing number of questions around the ‘tipping point’ for the EV market.
At what point does it make economic sense for an internal combustion engine to be replaced either by a plug-in hybrid or by and all-out battery vehicle? Black Rock’s CEO believes the combination of falling battery costs and diminishing supply bottlenecks in lithium and cobalt production are bringing the fabled tipping point ever closer.
“Add in some economies of scale and you can imagine how quickly the cost of a lithium-ion battery is going to drop and we are going to rapidly transition to EVs.
“Plus, if you consider how that ties in with autonomous vehicles, I think there is a perfect storm beginning to brew around level 5 autonomy vehicles and the role of an EV in that autonomy.”
It’s not just the burgeoning autonomous and EV markets that are uplifting the prospects of major graphite producers. There are also a plethora of expanded graphite applications, the importance of which have been grimly underlined by the recent tragedy of the Grenfell tower fire in London.
In the aftermath of the fire, a strong degree of pressure has been applied for building contractors to ensure materials are adequately flame-retardant, with expanded graphite’s anti-flame propagation properties making it an essential material applied to building cladding.
Black Rock is on track to publish its all-important DFS for the Mahenge project by around the third quarter of 2018, at which point it will be able to proceed with a detailed front end engineering design (FEED). The DFS will also be the final document in the mining license application.
Once the license is approved, the company will look to secure project finance. The company is making solid progress with regards to reopening Tanzania and its pragmatic approach to risk management is giving Black Rock confidence that a pathway to funding will emerge, says de Vries.
FEED is likely to be completed by the end of the year, and then the company has only a 12-month construction run left on the schedule before production at Mahenge begins in earnest in late 2019.