A new private company will be incorporated in Uganda to refine graphite for use in electric batteries, Blencowe Resources, the operator of the Orom Cross graphite project in the northern Uganda district of Kitgum, has announced.
The announcement came after Blencowe signed a Memorandum of Understanding (MoU) for the creation of a joint venture with Triessence Limited, a company from Singapore, to put up the first graphite beneficiation facility in Uganda, near the Orom Cross project.
Graphite is listed as a critical mineral that forms part of the metals needed for the manufacturing of electric batteries.
“This venture will set Blencowe apart from competitors focused solely on producing graphite concentrate and provides a life-of-mine offtake partner near the Orom-Cross Project, offering significant additional commercial advantages. With this JV, Blencowe has strategically aligned with two highly experienced Asian graphite specialists to ensure successful delivery,” reads a Blencowe statement.
The JV, the company said, allows it to bring in top industry experts to its Uganda project, share risk and create value.
Blencowe says a tonne of graphite processed to more than 99% fetches $2,000 today, compared to the $500 per tonne for the 96% concentrate.
Plans to put up a beneficiation facility offer some guidance on Blencowe’s possible next course of action when it finally starts to produce graphite.
There have been questions as to what will happen when production of graphite starts, considering Uganda has banned the export of raw materials. The ban has stifled exploration capital in the country’s young mining industry and seen an exodus of wild cat firms to more conducive jurisdictions.
“Blencowe has long recognised the substantial advantages downstream upgrading of graphite in-country can offer and securing experienced partners who have the expertise to help us deliver successful [refined raw material] production was essential. I am delighted to say that this MoU is another significant milestone in enhancing both the value and distinctiveness for our company,” said Cameron Pearce, Blencowe’s Executive Chairman.
Last week, Blencowe announced that it had delivered tonnes of processed graphite, which had been shipped out of Uganda earlier this year for testing, to potential clients in Japan, South Korea and China for assessment.
The company, which hopes to get feedback from these clients in early October, is confident that its product, which was refined to more than 99% in a facility in China, will pass the test.
According to the terms of the MoU with Triessence, the two businesses will each hold a 50% stake in the JV company. Blencowe will retain full ownership of the Orom-Cross project though.
However, Uganda’s new mining law allows for the government to take up to 15% shareholding in a mining project of its choice.
Triessence has agreed to fund 50% of the construction of the beneficiation facility. The company also agreed to purchase all end product of the first products that will be refined in China, and oversee the sale of different finished products to the international market.
Blencowe is currently undertaking a Definitive Feasibility Study (DFS) for its Orom-Cross project. The study, which is expected to be completed in the first quarter of 2025, will be used to attract investment capital into the project. Blencowe says it needs initial capital of at least $62 million.
Now, according to the MoU signed with Triessence, the DFS for the proposed beneficiation facility will be integrated into the Orom-Cross DFS for what the company says will be a comprehensive development strategy.
If Blencowe achieves its goal of putting up a beneficiation plant in Kitgum, it would be the second such plant for a critical mineral in Uganda. In April, President Yoweri Museveni officially commissioned Woodcross Tin Smelting plant in Mbarara district.
However, while Woodcross has struggled to get enough raw supplies to meet the capacity of its tin processing plant, Blencowe appears well positioned not to have such issues as the company gets closer to production at Orom.
