Gemcorp Capital Management Limited (“Gemcorp”) is pleased to announce that one of its funds has entered into a US$25m loan agreement with a subsidiary of Walkabout Resources Limited, an ASX listed African focused energy mineral developer (“Walkabout”), to support the development into production of its Tanzanian graphite mine, Lindi Jumbo.
Lindi Jumbo is a high grade graphite deposit in south-eastern Tanzania and is being developed to take advantage of the increasing demand for natural flake graphite. The mine will reach a capacity of 40,000 tonnes per annum and will have the potential for future expansion dependent on further feasibility studies.
Lindi Jumbo’s resource base has a large proportion of jumbo flakes which command a premium in the market. As the global demand for electric vehicles and clean energy continues, the demand for fine flake, natural graphite is expected to increase as the preferred anode material in batteries. Natural flake graphite is cheaper, has a higher capacity and requires lower energy consumption when processing for use in batteries compared to synthetic graphite.
The lithium-ion battery industry is expected to be the major driver of demand over the next decade for fine flake graphite. According to Benchmark Mineral Intelligence, natural flake graphite demand from lithium-ion batteries and non-batteries is forecast to grow at a CAGR of ~16% between 2023 and 2030. Graphite is, thereby, key to the transition from fossil fuels-based to electric vehicle mobility across the globe.
Globally, the majority of graphite is currently mined (>70%) and processed (>90%) in China. Shandong in China was previously the principal source of jumbo graphite but many of its mines have closed meaning East Africa’s graphite industry is well-positioned to meet this demand.
The London-based emerging markets asset manager said it is excited to be a long-term partner with Walkabout on the Lindi Jumbo Graphite Project which would contribute to reducing the supply gap in the graphite market. Gemcorp is particularly pleased with Walkabout’s focus on sustainable growth as its Lindi Jumbo project offers an environmental, social and governance advantage by being less carbon intensive than other mining developments. Walkabout additionally operates with a company philosophy of “Tanzania First, Local First” to ensure that the local communities and economy are uplifted through employment and local procurement. Walkabout employ a Tanzanian management team and c. 100 workers, the majority of which are local.
Andrew Cunningham, Walkabout CEO said: “We are very pleased with the final execution of the debt facility and to have the support of Gemcorp as we move into the final stages of the construction of the Lindi Jumbo Graphite Mine.”
Gautam Sahdev, Gemcorp Portfolio Manager said: “We are delighted to have worked with the Walkabout team and provide completion capital for the Lindi Jumbo Graphite Mine. We see huge potential in the graphite market and this material’s uses in powering the energy transition future.”
