TIB Bank approves EcoGraf’s U$60m financing for Epanko Graphite

08Apr 2021
The Guardian Reporter
Dar es Salaam
The Guardian
TIB Bank approves EcoGraf’s U$60m financing for Epanko Graphite

IN a major breakthrough for Epanko Graphite Mine, TIB Development Bank has endorsed EcoGraf’s U$60 million (over 139.1bn/-) financing arrangement from German development bank, KfW IPEX-Bank.

EcoGraf’s managing director, Andrew Spinks.

In a recent report, EcoGraf said the debt financing discussions with Ministry of Minerals, Mining Commission, Ministry of Finance and the Bank of Tanzania have materialised hence KfW IPEX-Bank and the Australian based company have since developed a debt financing structure that fully complies with the country’s new mineral legislation relating to banking arrangements.

“After conducting further joint briefings with KfW IPEX-Bank to present the proposed financing arrangements to the government of Tanzania and its wholly-owned development bank, TIB Development Bank, the company has received confirmation from TIB Development Bank that it would like to progress the Epanko funding transaction,” the report said.

EcoGraf which has invested U$20 million at Mahenge based Epanko Graphite Mine through its local subsidiary, TanzGraphite, said the next steps will involve completion of due diligence processes, preparation of loan documentation and formal approvals from governments of Germany and Tanzania.

“Completion of a bankable feasibility study for an initial 60,000 tonne per year operation has also been concluded. The study was led by GR Engineering Services Limited and involved input from contractors and consultants in Tanzania and overseas. It confirmed that Epanko will be a highly profitable, long-life and scalable new graphite mining operation,” the report stated.

Epanko is forecast to expand over time to meet growing market demand for battery graphite and is expected to operate for 40-50 years. Financial modelling indicates that over that time, economic benefits of over US$3 billion will accrue to Tanzania, through employment, procurement, royalties, taxes and dividends.

“Over 95 percent of the 300 permanent staff will be Tanzanian, with an estimated 4,500 indirect jobs to be supported by the operation,” said the Australian Stock Exchange listed company.

The Epanko bankable feasibility study social and environmental planning programs have been conducted in compliance with the Equator Principles, a globally recognised risk management framework adopted by leading financial institutions for assessing and managing social and environmental risks in new developments.

“Achieving this standard and satisfying International Finance Corporation Performance Standards and World Bank Group Environmental, Health and Safety Guidelines is critical to securing international financing support for the new development and reflects EcoGraf’s commitment to ensuring the highest level of environmental, social and governance operating standards,” the report added.

In conjunction with the financing process, EcoGraf will also be undertaking Epanko enhancement studies in relation to: defining the potential for ‘fresh rock’ graphite within the Epanko resource to deliver a high purity 99 percent carbon graphite without additional processing; and evaluating the benefits of low-impact, continuous mining methods at Epanko through the use of proven surface mining equipment.

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