Chinese company boosts stake in the exploration of graphite deposits in Mozambique

14 October 2019

Mining company Jinan Hi Tech will help bolster China’s presence in Mozambique’s graphite extraction and processing after receiving authorisation from China’s National Development and Reform Commission to buy a 34.01% stake in Australia’s Triton Minerals.

The acquisition of that portion of the Australian company’s share capital for 19.5 million Australian dollars, announced at the end of June, “is a major support for Jinan Hi-Tech’s partnership with Triton Minerals to develop the world-class Ancuabe graphite project,” according to a statement issued in Perth.

Triton Minerals also said it expects the conditions for the deal to be in place in the coming weeks, with approval by the Commission facilitating the authorisation by the Chinese Ministry of Finance for the transfer of the capital involved in the acquisition.

According to information disclosed at the conclusion of the deal, Jinan Hi-Tech will initially acquire a 19.3% stake owned by Shandong Tianye Mining in Triton Minerals at 6.2 cents per share or a total of 11 million Australian dollars.

The second phase will consist of an issue reserved for Jinan Hi-Tech of 207.3 million shares of Triton Minerals at a unit price per share of 4.1 cents or a total of 8.5 million Australian dollars.

This capital injection will allow Triton Minerals to start the development of the Mozambique project, with the contractor who will be working on the project, and the engineering, component procurement and construction (EPC) projects.

Triton Minerals signed an EPC contract with Chinese company MCC International Incorporation in September 2018 to build the facilities and infrastructure of Ancuabe’s graphite exploration project in Mozambique.

The project contains estimated graphite deposits of 3.04 million tonnes, with the definitive economic feasibility study determining that the concession can produce 60,000 tons of graphite concentrate per year over a 27-year period.

This year Triton Minerals signed a memorandum of understanding with Chinese company Qingdao Jinhui Graphite Co. Ltd, covering investment in the Ancuabe project, providing additional financing through debt or equipment financing, the purchase of up to 15,000 tons of graphite concentrate per year and technical collaboration to add value by supplying graphite to Chinese refractory and battery companies.

In July 2018, the Australian company had already signed a letter of intent with MCC International Incorporation Limited (MCC), the Metallurgical Corporation of China Ltd, the company for the group’s foreign business, to sign an agreement for project preparation, engineering, component acquisition and construction (EPC) in the concession for graphite exploration in Ancuabe, northern Mozambique.

The Chinese market is becoming increasingly important for another graphite extraction project in Balama, Cabo Delgado province, which is operated by Australia’s Syrah Resources.

Under a recent agreement with intermediary Gredmann, from this year until 2021 the Balama mine will supply China with 9,000 tonnes of graphite per month out of a total of 279,000 tonnes of graphite from Mozambique.

Syrah Resources had already signed a binding contract with Chinese company Qingdao Langruite Graphite to supply 48,000 tonnes of graphite to be extracted at the Balama mine, and also with Qingdao Freyr Graphite Co., Ltd. (6,000 tonnes of graphite over the next 12 months). (Macauhub)