Blencowe Resources Plc, the operators of the Orom-Cross project in the northern Uganda district of Kitgum, has shipped its first consignment of processed graphite flake to potential customers in Japan and South Korea, the company announced yesterday.
This was after the last internal tests on the graphite in a laboratory in China proved that the concentrate is now ready for the manufacturing of electric batteries.
Now, the tier one customers in Japan and South Korea are testing the graphite to see if it meets their standards before giving the concentrate a clean bill of health.
Should the concentrate pass the test, Blencowe would then move to exporting graphite out of its Orom-Cross project – a first for Uganda.
The UK company says it hopes to get feedback from Japan and South Korea by the first week of October, and thereafter become a commercial exporter of large flake graphite.
“This is the final step for qualification of Orom-Cross material for commercial use by these potential customers and is the pathway toward securing future offtake agreements. Samples are also being supplied to major Chinese battery manufacturers,” the company said of the samples taken to the Asians.
Blencowe, which holds a 21-year mining license for the Orom-Cross project, dug the graphite in Kitgum in late 2023. At least 600 tonnes of graphite were shipped to China for testing and purification in January 2024.
Blencowe says that some of its senior executives are currently visiting potential clients for graphite.
“Once we have assembled a range of customers and offtake agreements, we have effectively de-risked the project ahead of project financing and construction, therefore the next few months will be highly value accretive for the company,” Cameron Pearce, the Executive Chairman of Blencowe Resources Plc, is quoted as saying in the statement.
The company already anticipated that one of the areas for discussion with potential clients would be around environmental, social and governance (ESG) concerns.
As such, Blencowe says it has submitted an updated Environmental Social Impact Assessment (ESIA) to the government of Uganda “to reflect the revised Orom-Cross operation plan, enhancing content of environmental and social commitments to align with guidelines from potential funding parties.”
Getting funding for graphite projects has been tough. Although the World Bank says that demand for minerals such as graphite will outstrip supply in the medium term, with some experts estimating that the global graphite market will hit $21 billion by 2027, funders are worried that the mineral is deployed in, at most, just two different technologies.
Graphite is listed as one of the global critical minerals that is needed for the transition from the use of dirty fuels such as coal and petroleum to a cleaner form of energy such as electric batteries.
Nevertheless, Blencowe Resources Plc says it has so far received $3.5 million of the agreed $5 million from the private sector lending arm of the USA, the Development Finance Corporation (DFC) to get the Orom Cross project closer to production level.
According to a pre-feasibility study by Blencowe, the company says it needs an initial capital injection of $62 million to get the project to produce graphite at peak.
The company estimates that the project can generate $1.1 billion in free cash over the 14 years of the Orom-cross mine life.
Nabil Alam, Country Manager, CAR/Blencowe Uganda
Nabil Alam, the Country Manager, Blencowe Uganda and Consolidated African Resources (which Blencowe acquired in 2019) says the project’s definitive feasibility study (DFS) is near completion which should put the company in position to undertake a final investment decision (FID).
“We’re hoping that happens FID is undertaken in early 2025,” Alam said, at a press conference in Kampala yesterday organized by the Uganda Chamber of Mines and Petroleum (UCMP) to launch the inaugural “30 Days of Mining” media campaign.
Running under the theme “Leveraging Critical Minerals for Sustainable Development and Economic Transformation,” the campaign precedes the 13th annual Mineral Wealth Conference, set for next month, October 1-2 at the Kampala Serena Hotel.
