POSCO doubles down on Black Rock Mining’s graphite project

Western countries are looking to diversify away from Chinese graphite supplies.

South Korean steel conglomerate POSCO has agreed to tip $US40m into graphite developer Black Rock Mining, which is almost equal to the company’s current market capitalisation.

The investment will come in two stages, with an initial $9m at 5.8c per share taking POSCO from a 10.1 per cent share in Black Rock up to the maximum 19.9 per cent before a takeover is launched. The second tranche will wait until a final investment decision (FID) is made on module one of the company’s Mahenge graphite project in Tanzania, with POSCO to be offered shares at the same price as other investors, with its stake again to be capped at 19.9 per cent. POSCO has also secured a long-term offtake agreement from module two of the development as part of the deal, adding to its offtake deal for all of the production for module one.

Black Rock chief executive John de Vries said the deal substantially de-risked the project.

Mr de Vries told the Africa Down Under conference in Perth on Wednesday the company also had $US153m in debt approvals for Mahenge’s development in place with the completion of loan documentation imminent.

Module one of Mahenge aims to produce 89,000 tonnes of graphite per year, with an initial operating life of 26 years.

On the company’s current numbers its all in sustaining cost of production comes in at $US518t, well below the basket graphite price of $US1709t.

The company is aiming for FID in calendar 2026 with first production two years later.

The agreement is subject to Foreign Investment Review Board approval and approval from Tanzania’s Fair Competition Commission.

The Copulos Group, led by Stephen Copulos, is also a significant holder of Black Rock with a 10.9 per cent stake.