South Korea's Posco International has signed a $40mn investment deal with Australia-based Black Rock Mining to double its supply of graphite from the company's Tanzanian mine to 60,000 t/yr.
Posco now holds a 19.9pc stake in Black Rock Mining, which owns the Mahenge project in Tanzania, with the aim of securing the graphite produced at the mine early to build its integrated secondary battery material supply chain. Black Rock plans to start construction of the mine this year and full-scale commercial production in 2026.
Posco invested in the first phase of the mine development last year. Once Phase 1 production begins, Black Rock will supply the company with 30,000 t/yr of graphite over 25 years, for a total of 750,000 t/yr. The additional Phase 2 development contract will give Posco an additional 30,000 t/yr for up to 25 years.
The company expects that its Posco Future M battery material subsidiary will be able to use this non-Chinese graphite to produce cathode materials that comply with the US Inflation Reduction Act and the EU's Critical Raw Materials Act requirements for raw material sourcing.
Battery material producers are also looking for alternative supply sources as China — which produces most of the world's natural and synthetic graphite used in electric vehicles (EVs) — introduced curbs on exports last year.
Posco is capitalising on the decline in EV battery demand to secure access to raw material assets such as lithium salt lakes and mines with high growth potential in the future, the company said. Developing battery materials production aligns with Posco's strategy to supply South Korean manufacturers and help reduce their reliance on imports.
The company also expects to expand the scope of its graphite business by signing a global sales contract with Black Rock for industrial graphite used in steel, cement, and automotive components. The amount of industrial graphite that will be produced at the mine is enough to meet South Korea's domestic demand, contributing to its critical mineral resource security, Posco said.
