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Singapore Firm to Fund Tanzania Graphite Project

A boost for the battery industry and Tanzania

by Motoni Olodun

A Singapore-based company, PEY, has agreed to provide $320 million for the development of a graphite project in Tanzania. The project is owned by Magnis Energy Technologies, an Australian company that focuses on producing high-quality graphite for the battery industry.

The project, known as the Nachu Graphite Project, is located in the south-east of Tanzania, near the border with Mozambique. The project has a total resource of 240 million tones of graphite, with an average grade of 5.2%. The graphite from the project is suitable for making anode materials for lithium-ion batteries, which are used in electric vehicles, smartphones, and other devices.

PEY, which stands for Power Energy Yield, is a company that specializes in financing and developing renewable energy and battery projects in Asia and Africa. The company has signed a binding term sheet with Magnis to provide the funding for the Nachu project, subject to due diligence and final approvals.

The funding will consist of $120 million in equity and $200 million in debt, with an interest rate of 8.5% per annum. The equity component will give PEY a 20% stake in the project, while Magnis will retain the remaining 80%. The debt component will have a repayment period of 10 years, with a grace period of two years.

The funding will enable Magnis to start the construction of the project, which is expected to take 18 months. The project will have a production capacity of 240,000 tonnes of graphite per year, with a mine life of 31 years. The project will also have a modular design, which will allow for future expansion.

Magnis chairman Frank Poullas said that the funding agreement with PEY was a major milestone for the company and the project. He said that PEY was a strategic partner that shared the company’s vision of producing high-quality graphite for the battery industry. He also said that the project would bring significant benefits to Tanzania, including job creation, infrastructure development, and revenue generation.

PEY CEO James Harris said that the company was excited to partner with Magnis and support the development of the Nachu project. He said that the project was aligned with the company’s mission of investing in renewable energy and battery projects that have a positive impact on the environment and society. He also said that the project would help meet the growing demand for graphite and batteries in the global market.

The Nachu Graphite Project is one of the few graphite projects in the world that have a binding off-take agreement with a major battery manufacturer. Magnis has signed a 10-year agreement with SINOMA, a Chinese state-owned company that produces lithium-ion batteries for electric vehicles. The agreement covers the supply of 80,000 tones of graphite per year, which represents 33% of the project’s production.

The demand for graphite and batteries is expected to increase in the coming years, as the world shifts to a low-carbon economy. Graphite is a key component of batteries, as it is used to make the anode, which stores the lithium ions. Graphite is also a versatile material that has applications in various industries, such as aerospace, electronics, and metallurgy.

The Nachu Graphite Project is poised to become a world-class graphite producer, with a competitive cost structure, a high-quality product, and a secured market. The project will also contribute to the development of Tanzania, which is rich in mineral resources but faces challenges in attracting foreign investment. The project will showcase the potential of the country’s mining sector and its role in the global battery supply chain.


Source: mining weekly

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