Is Black Rock Mining (ASX: BKT) finally turning a corner? Mahenge Graphite Project kicks off construction phase

Black Rock Mining Limited (ASX: BKT) has officially commenced early works at its flagship Mahenge Graphite Project in Tanzania, marking a significant milestone for the ASX-listed graphite developer. On October 9, 2025, a formal groundbreaking ceremony was held at the project site in the presence of Tanzania’s Minister of Minerals, Anthony Mavunde, and high-level international dignitaries including representatives from POSCO International and the Republic of Korea. This event signals the beginning of on-ground activity for what could become one of the world’s most significant graphite mining projects outside China.

The company’s share price responded with notable momentum, closing at AUD 0.027 on October 10, 2025, up 28.57% from the previous trading session. With over 42 million shares traded and a current market capitalization of AUD 45.73 million, institutional investors appear to be recalibrating their attention toward the long-anticipated construction phase of Mahenge.

Mahenge is not just another mining project. With an estimated resource of over 200 million tonnes and the second-largest graphite reserve globally, the asset has attracted strategic interest from battery materials players, governments, and development financiers. Black Rock Mining holds an 84% stake in the project and has secured all necessary environmental approvals, mining licences, and its resettlement action plan—putting it in a “construction-ready” status, contingent on full financial close.

How does the Mahenge Graphite Project align with global supply chain security efforts and critical minerals geopolitics?

The Mahenge Project has become a flagship case study in how critical minerals projects in emerging markets can align with global supply chain security strategies. The Republic of Korea, which assumed the rotating chair of the Minerals Security Partnership (MSP) in July 2024, has strongly backed the development of Mahenge. The MSP, which comprises 14 countries and the European Union, is an intergovernmental framework aimed at diversifying and de-risking mineral supply chains essential to semiconductors, EV batteries, and clean energy technologies.

POSCO International’s role as offtake partner is central to this framework. The Korean steel and materials conglomerate is already contracted to take 100% of Mahenge’s fines output from Module 1 and Module 2. Additionally, POSCO Future M has committed to constructing a new spherical purified graphite (SPG) plant to support its 70ktpa Sejong anode facility in South Korea.

In his remarks during the groundbreaking event, Black Rock Mining Chairman Richard Crookes emphasized that Mahenge’s transparent governance and structured financing model make it an attractive asset to lending institutions. He referenced the project’s blended funding model involving Tanzania’s CRDB Bank, the Development Bank of Southern Africa (DBSA), and South Africa’s Industrial Development Corporation (IDC). According to Crookes, Mahenge demonstrates that major projects can indeed be financed and delivered in Africa when backed by sound partnerships, ESG compliance, and clear execution pathways.

What does the early works phase entail, and why is it pivotal for the next stage of Mahenge’s development?

The early works program is designed to complete enabling infrastructure and foundational construction ahead of the full-scale buildout. This includes ground clearance, road upgrades, contractor mobilization, and preparation for heavy equipment delivery. Critically, it also initiates work on the 220kV high-voltage powerline that will connect Mahenge to the hydroelectric-rich grid via Ifakara.

This lateral transmission line is not just project-critical—it is regionally transformative. By ensuring competitively priced power for Mahenge, the line positions the project in the lower quartile of global graphite production costs. At the same time, it unlocks industrial potential in Tanzania’s Ulanga region, potentially catalyzing downstream processing and further resource development.

The early works program will also lay the foundation for future modules of Mahenge. Module 1 alone is expected to create over 400 full-time equivalent (FTE) jobs, while the full four-module configuration could support more than 900 FTE roles.

Why is Mahenge considered one of the world’s top-tier graphite assets, and how do the economics stack up?

Mahenge’s resource profile is among the best globally. According to the JORC-compliant reserve estimate, the project holds 70.5 million tonnes at 8.5% total graphite content (TGC), translating to approximately 6 million tonnes of contained graphite. In terms of measured and indicated resources, Mahenge stands at over 116 million tonnes with an average grade of 8.0% TGC.

The company’s enhanced Definitive Feasibility Study (eDFS), completed in July 2019 and updated with a Front-End Engineering Design (FEED) process in September 2022, outlines robust financial metrics. The adjusted C1 cash cost is projected at just USD 359 per tonne, placing the project well within the first quartile of global producers. The low-cost profile is partially attributed to grid access via hydroelectric power, a key competitive differentiator.

Initial capital expenditure is forecast at USD 231 million, which includes USD 182 million for Module 1, USD 33 million for the powerline, and USD 16 million in early works and related activities. The cost estimates are classified as Class 2 (+/-10% accuracy) and reflect refined inputs following the FEED stage.

On the returns side, the project boasts an unlevered internal rate of return (IRR) of 36% post-tax and post-government free carry, based on consensus graphite pricing forecasts. Net Present Value (NPV10) is estimated at USD 1.4 billion post-tax, affirming the project’s scale and margin potential.

How much project funding has Black Rock Mining secured so far, and what milestones remain before final investment decision?

In September 2024, Black Rock Mining announced that it had signed a USD 179 million facility agreement with DBSA, IDC, and CRDB Bank. These funds will finance a substantial portion of the project’s initial capex requirements. However, full construction is still contingent on securing the remaining equity or mezzanine tranches.

The early works initiative is therefore not just technical preparation—it is a confidence-building mechanism for equity partners, export credit agencies, and institutional lenders considering participation in the final round. Management has consistently signalled that the project is now “construction-ready,” and the focus has shifted to aligning capital flows with execution milestones.

Given the structure of POSCO’s involvement, offtake certainty is largely de-risked for the first two modules. This, combined with the project’s geopolitical alignment with MSP, could be a powerful catalyst for additional capital inflows from sovereign funds, ESG-aligned institutions, or EV supply chain participants seeking long-term upstream exposure.

What does Black Rock Mining’s share price trend reveal about investor sentiment, and can the stock rebound after the Mahenge milestone?

Despite achieving key regulatory and funding milestones, Black Rock Mining shares have underperformed over the past year. The stock is down 46.53% year-over-year as of October 10, 2025. Yet the recent 28.57% single-day gain suggests a shift in sentiment following the groundbreaking announcement.

The company currently trades at a market capitalization of just AUD 45.73 million, a fraction of its NPV. For context, that implies a valuation discount of over 96% compared to the project’s projected USD 1.4 billion NPV10. Institutional investors monitoring graphite, lithium, and battery materials supply chains may see this as an opportunity to enter at suppressed valuations—particularly with equity placement or joint venture announcements expected in the near term.

Black Rock’s trading volume also surged, with over 42 million shares exchanging hands, signalling renewed retail and possibly speculative interest. However, long-term re-rating will depend on clear progress toward financial close and full-scale construction.

What key risks could impact Black Rock Mining’s Mahenge Project, and which near-term catalysts should investors watch in 2025?

While the early works program represents a tangible step forward, several risks still loom. These include delays in securing final equity capital, potential cost escalations amid global inflationary pressures, and possible policy changes affecting export regimes or mining taxation in Tanzania.

However, there are also powerful upside triggers. The most immediate is the announcement of Final Investment Decision (FID) and confirmation of full funding. Other near-term developments include updates on POSCO Future M’s SPG plant progress, additional offtake agreements for Modules 3 and 4, and any strategic partnerships that would deepen Mahenge’s vertical integration with downstream graphite processing.

Investors and analysts tracking the Minerals Security Partnership and non-Chinese graphite sourcing strategies are also likely to watch Mahenge closely. With China tightening graphite export controls as of late 2024, jurisdictions like Tanzania that offer geopolitical alignment and long-term offtake structures may become significantly more attractive to Western buyers.