Armadale signs graphite MoU with Chinese importer

By Davide Ghilotti
Published: Wednesday, 03 April 2019

The memorandum of understanding will run for five years and covers 60% of flake graphite produced at the Mahenge Liandu project in Tanzania.

Graphite developer Armadale Capital has signed a memorandum of understanding (MoU) with Chinese miner and processor Matrass Group for the offtake of 30,000 tonnes per year of flake graphite from Armadale’s Mahenge Liandu project in Tanzania.

The unbinding MoU will run for an initial five-year period, and will cover about 60% of Armadale’s expected output from the Tanzania mine.

A further 19,000 tpy of expected output remains to be covered, with the company still in discussions with a number of potential customers to book the remaining volumes.

There is "growing market demand for graphite from the region [in Tanzania]," Nick Johansen, director of Armadale, said, citing a recent binding offtake agreement that fellow graphite miner Black Rock Mining has earmarked for 205,000 tpy from its project. Johansen expects full production output to be booked under future agreements.

Armadale is carrying out test work on graphite samples from Mahenge Liandu to turn the deal into a binding one by the end of the current quarter and working on the feasibility study and environmental and social impact study for the project.

Fastmarkets’ assessment of the price of flake graphite, 94-97% C, +80 mesh, was $900-1,200 per tonne cif Europe on Thursday February 21, unchanged since the beginning of the year.

The price of flake graphite, 94-97% C, +100 mesh, was assessed at $800-1,000 per tonne cif Europe on the same day, unchanged since November 2018. While the price of flake graphite, 94-97% C, -100 mesh, was assessed at $650-840 per tonne cif Europe, also unchanged since November 1, 2018.

In a separate development, Canadian junior miner NextSource Materials has been granted a 40-year mining license for the Molo Graphite Project in Madagascar.

The mining license, issued by the Madagascan government, does not limit mining to any specific volume, which the company says it will be able to produce in line with evolving market demands.

"The company can now implement the final steps in our mine development schedule toward achieving production in early 2020," Craig Scherba, president and chief executive of NextSource said in a statement.