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Black Rock Mining inks offtake agreement to supply large quantities of graphite concentrate to Heilongjiang Bohao

Black Rock is completing its definitive feasibility study for the Mahenge Graphite Project in Tanzania this month and will produce the concentrate from the project’s graphite resources.
Black Rock sees the deal as underwriting its production step-up plans

Black Rock Mining Ltd (ASX:BKT) has signed a major offtake agreement to supply up to 90,000 tonnes a year of blended graphite concentrate to Heilongjiang Bohao Graphite Company Limited.

The agreement is for up to 3 years and is the largest signed by any graphite developer by order of magnitude.

The Perth-based company is finalising its definitive feasibility study (DFS) this month after building a very large test plant in Canada for its DFS and trialling its concentrate with key potential future customers.

READ: Black Rock Mining signs strategic cooperation agreement with major Chinese METS company

The three-year agreement commits Black Rock to supplying 30,000 tonnes of blended graphite concentrate in year 1, 50,000 tonnes in Year 2, and up to 90,000 tonnes in Year 3.

Black Rock’s graphite source would be its flagship Mahenge Graphite Project in Tanzania.

During testing, concentrate produced from Mahenge’s Ultra Purity-FP Flake Graphite had a minimum purity of 99.0% LOI (Loss-on-Ignition) and was well received by potential customers.

At the time, the purity was a milestone, with Black Rock chief executive officer John de Vries acknowledging the company was “the only graphite developer that can produce a 99%+ concentrate” and that was attracting potential offtake customers.

READ: Black Rock Mining raises $3 million in oversubscribed placement

Today, De Vries said: “The signing of this offtake agreement vindicates our pilot plant strategy that saw us producing around eight tonnes of graphite concentrate from a 90-tonne run, which enabled us to deliver meaningful volumes of product to 24 potential customers around the world.

“Ninety thousand per annum is the largest offtake agreement signed by any developer by an order of magnitude and substantially underwrites our steady state operations of 240,000 tonnes per annum.”

Black Rock reported agreement “underwrites” its proposed three-phase construction strategy, accounting  for about 37.5% of proposed steady state annual production of 240,000 tonnes a year.

Heilongjiang Bohao is a both a graphite miner in China’s Heilongjiang Province and one of republic’s largest suppliers of graphite.

Its graphite is used for a variety of industrial purposes, including batteries.

READ: Black Rock Mining gets positive feedback for Mahenge graphite from potential customers

De Vries reported today: Heilongjiang Bohao Graphite Company Limited is a great offtake partner being one of China’s largest fully integrated graphite producers.

Heilongjiang’s operation is working towards consuming up to 100,000 tonnes of flake graphite a year.

Black Rock’s CEO said: “The partnership between Black Rock and Heilongjiang Bohao will be key for both parties in the coming years.”

The pricing of concentrate under the agreement is to be inked within the next 12 months, with the price set on a quarterly basis once market prices for flake size and concentrate grades are taken into account.

Black Rock signalled today it was continuing to have “positive discussions with additional potential customers with respect to signing binding supply contracts for the balance of its annual production”.

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