Walkabout Resources has begun work on the first new mining project in Tanzania since the East African country’s government rocked the sector by unexpectedly introducing a raft of onerous laws.
The Perth-based company said it has pressed the button on pre-start activities at its US$32 million ($41m)Lindi Jumbo graphite project with hopes to be in production in the second quarter of next year.
Walkabout chief operating officer Allan Mulligan said Lindi Jumbo would be one of the highest-margin graphite mines in the world because of its very high percentage of large, jumbo and super-jumbo sized flakes in concentrate.
“With large flake graphite prices increasing by more than 2 per cent in April and demand from the lithium-ion battery industry expected to outstrip supply by 2025, Roskill has predicted prices will continue to rise,” he said.
In April, Walkabout secured US$20m in debt funding from CRDB Bank of Tanzania and this month completed a $6.4m placement representing the first tranche of a three-tranche equity raising.
The company is now tapping shareholders in a $7.6m rights issue, representing the second tranche.
The board is also assessing options for the third and final tranche with an announcement expected before the end of next month.
Lindi Jumbo represents the first mining project in Tanzania since 2017 when the country’s late president John Magufuli introduced new mining laws that gave his government power to tear up the contracts, partially nationalise companies, enforce local processing, bring in strict local content requirements and deny rights to international arbitration.