Chinese group may finance graphite project in Mozambique

28 April 2015

Triton Minerals has signed a letter of intent with Chinese group Shenzhen Zhongjin Qianhai for US$200 million to finance a graphite mining project in Mozambique, the Australian mining company said Monday.

The final agreement will be signed by the end of June and provides for a direct investment of US$100 million by the Shenzhen Zhongjin Qianhai Group Co., Ltd (SZQG) in Triton Minerals’ equity, with the remaining amount granted through a loan, said the Australian company in a statement sent to Macauhub.

Among the conditions set by the Chinese group for the loan is the annual supply of 200,000 tons of graphite concentrate over a decade from the monte Nicanda project in northern Mozambique, at a minimum price of US$750 per ton.

Triton Minerals expects that the minimum amount of this supply agreement will be US$1.5 billion, which will ensure the necessary investment for the start of graphite exploration activities in this deposit, “the largest known graphite reserve” which is part of the Balama Norte concession, one of three that the company operates in Mozambique.

Headquartered in the city Shenzhen, in Guangdong Province, the SZQG group focuses on finance, retail and trade, managing a portfolio of assets valued at around US$10 billion, according to the Triton press release.

Since the beginning of the year, the Australian mining company has signed at least two important agreements with Chinese groups, seeking financing for its graphite exploration projects in Mozambique.

The most important was announced at the beginning of April and involves a contract with Yichang Xincheng Graphite Co. (YXGC), which is for 20 years and gives Triton Minerals exclusive rights to supply graphite to this company in Malawi, Madagascar and Tanzania, and Mozambique.

The commercial contract guarantees a minimum sale price of US$1,000 per ton of graphite that the Chinese company will purchase during the 20-year contract period, with the overall value of the deal set at a minimum of US$2 billion.

Triton Minerals has a majority stake of 80 percent in the three projects it explores in Mozambique – Ancuabe, Balama Norte and Balama Sul – and the remaining share (20 percent) is owned by Grafex Ltd.(macauhub/MZ)