POSCO International Corporation, a subsidiary of South Korean steel and battery materials conglomerate POSCO Group, has signed a binding agreement to invest $40 million in Black Rock Mining's Mahenge graphite project in Tanzania. The investment will secure a significant portion of the mine's graphite production for POSCO's electric vehicle battery supply chain.
Under the agreement, POSCO International will acquire a 19.9% stake in Black Rock Mining, which owns an 84% interest in the Mahenge project, the world's second-largest natural graphite reserve with an estimated 6 million tons of resources. The investment will help fund the development of the mine, which is expected to produce up to 340,000 tons per year of 98.5% graphite concentrate for 26 years.
In exchange, Black Rock Mining's Tanzanian joint venture unit, Faru Graphite Corporation, will grant POSCO the future offtake rights for the fine graphite production from the project's Module 2. This agreement builds on an existing offtake deal signed in May 2023 for graphite from Module 1.
The investment aligns with POSCO's strategy to diversify its graphite supply sources and reduce reliance on Chinese imports, which currently account for around 90% of South Korea's graphite supply. POSCO aims to secure 30,000 tons of graphite annually from the Mahenge mine starting in 2026, with plans to increase this to 60,000 tons per year by 2028 - enough to produce batteries for 1.26 million electric vehicles annually.
The transaction remains subject to regulatory approvals, including from Australia's Foreign Investment Review Board and Tanzania's Fair Competition Commission. POSCO's stake in Black Rock Mining will increase from 10.1% to 19.99% after the first tranche of the investment.
