Modern Mining: Featured News

Most readers will know by now that graphite is one of the hottest commodities around with demand expected to show a sharp increase over the next few years. This is largely as a result of its use in a number of new technologies, including the lithium-ion batteries that are key to the on-going shift by automotive manufacturers to electric and hybrid vehicles.

Arthur Tassell commentAs a result of the growth in demand, exploration and development of graphite deposits is underway in a number of African countries. These include Tanzania, Uganda, Namibia and Madagascar but perhaps the ‘epicentre’ of the graphite boom is Mozambique and specifically Cabo Delgado Province in the north of the country, which looks to be emerging as one of the world’s great graphite producing areas.

Already it is home to one major new graphite mine, Balama, which Syrah Resources brought on stream towards the end of last year but others are on the way – notably the Montepuez project of Battery Minerals and the Ancuabe project of Triton Minerals. Syrah, Battery Minerals and Triton are all listed on the ASX and it is probably fair to say that Australians are leading the charge when it comes to the development of Africa’s graphite resources.

As an historical aside, the fact that Cabo Delgado Province hosts massive graphite deposits has been known for more than a century with the graphite occurrences in the area first being documented in the 1890s by John H. Furman, a geologist and engineer working for the Nyassa Company. In a report he prepared, he stated that north of Mualia he had discovered “the greatest deposits of graphite, of a most excellent quality which I think have ever been found. They extend several miles in length and will aggregate more than 700 ft in thickness.”

Syrah’s US$210 million Balama mine, now in its ramp-up phase is said to be the world’s largest – and one of the lowest cost – flake graphite mines. It is expected to produce 180 kt of product in CY2018 and between 250 and 300 kt in CY2019 but has the capability to produce 350 kt/a. The resource is huge and sufficient for a mine life of over 50 years.

After Balama, the next graphite mine likely to come on stream is the Montepuez project (see page 12) of Battery Minerals, located about 50 km north of Balama. Battery Minerals announced in early December that it had appointed the lead design engineers (DRA and Minnovo) and placed the order for the primary crusher, with a capacity of over 1,3 Mt/a (which is more than twice Montepuez’s initial requirement but allows for planned expansion).

Battery Minerals is hoping to have Montepuez commissioning by the end of this year with the first shipment of product expected in the first quarter of 2019. The project has a modular design with the pre-production capex being a very modest US$42,3 million for a production capacity of 45 to 50 kt/a. The company estimates that this can be doubled by spending a further US$25 to US$29 million and is planning to have this expansion in place by 2022.

Apart from Montepuez, Battery Minerals is also pursuing its Balama Central project – which lies immediately to the west of Syrah’s Balama property – and anticipates completing a feasibility study in the second quarter of this year.

While Balama Central could conceivably be the third new graphite mine in Cabo Delgado Province, a more likely candidate is Triton’s Ancuabe project, located 60 km west of Pemba. The company announced the results of a DFS – prepared by Lycopodium and other consultants – in mid-December 2017 and is targeting first production in the second half of 2019.

As detailed in the DFS, Ancuabe would cost roughly US$100 million to build and would have the capacity to produce around 60 000 t/a of graphite concentrate, with the payback period being 3,8 years from first production. Triton describes the economics as “robust”, pointing to an average annual revenue of US$82,6 million and EBITDA margins averaging 53 % over the 27-year evaluation period.

Triton’s tenements, incidentally, surround the historic – but small – Ancuabe graphite mine. German company AMG reopened the mine last year with the projected annual production being in the region of 9 000 tonnes.

Yet another company with tenements in Cabo Delgado Province is ASX-listed Mustang Resources. Probably best known for its Montepuez ruby project, it also holds the Caula graphite project (see page 6) along strike from Balama, which it has described as a “spectacular high-grade graphite discovery”. Caula is less advanced than the other projects mentioned above but a major step forward was taken recently when Mustang announced a maiden inferred mineral resource of 5,4 Mt at 13,0 % TGC (Total Graphitic Carbon) for 702 600 tonnes of contained graphite.

Summing up, Mozambique now has two graphite mines in production (Balama and AMG’s Ancuabe operation) with at least another two mines likely to be commissioned within the next couple of years. Coal apart, Mozambique has a very small mining industry so the emergence of a healthy and vibrant graphite mining sector is a very welcome development indeed for the country.

Arthur Tassell

Contact Modern Mining

Title: Editor
Name: Arthur Tassell
Email: mining@crown.co.za
Phone: +27 11 622-4770
Fax: +27 11 615-6108

Title: Advertising Manager
Name: Bennie Venter
Email: benniev@crown.co.za
Phone: +27 11 622-4770
Fax: +27 11 615-6108

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