GK eyes Mozambique graphite mine

Company is negotiating with the government for future mine exploration.

{reg} German graphite producer, Graphit Kropfm├╝hl (GK) AG, has expressed interest with Mozambique's Ancuabe graphite mine.

According to a report by Industrial Minerals (IM), a source from the Ministry of Mines revealed that GK is undergoing negotiations with the country over the future exploitation of the mine located in Mozambique's northern region. The publication also confirmed that GK is currently investigating the site which is located in the province of Cano Delgado.

The company told IM that the current supply from China being is ÔÇ£no longer as smooth as it was for many yearsÔÇØ prompting it to start searching for new sources of material to add to its assets in Europe, China, Sri Lanka and Zimbabwe.

According to GK's technical director, Christoph Frey, the project is currently at an early phase so it is too early to determine a fixed schedule for restarting the mine or revealing an exact production level.

ÔÇ£We believe Ancuabe could be brought back on stream within one or three years and production level could be several 1,000 tons per annum (TPA),ÔÇØ he added.

According to IM, Ancuabe had a production of 7,500 tpa natural flake graphite, with a capacity of 10,000 tpa a decade ago,
Despite being open for the evaluation of other graphite projects, GK told IM that its main focus at present is the Ancuabe project for its raw materials activities, the report said.

Previously, the Ancuabe mine was 80% owned by Kenmare Resources Plc, better known for its Moma mineral sands operation in Mozambique. The remaining 20% was owned by the government, the report said.

According to IM, Kenmare worked on the deposit between 1994 and 1999 but the company stopped production due to high energy costs and to the decrease on the average price of graphite which fell from around $1,300/ton to $450/ton.

The Mozambique government announced its intention to re-open the mine in 2007. In January 2009, French company Timcal Graphite & Carbon, won the tender and agreed to a deal with the government to restart graphite operations at Ancuabe.

The deal, however, was dropped in March 2010 as the mining company then estimated that the reserves were too small, the report said.

Mozambique has large natural flake graphite reserves estimated to be about one million tons of ore with a content of about ten percent graphite. Africa produces about 8,000 tpa with Madagascar and Zimbabwe being the main producers. {reg/}