Malingunde graphite mining to start in 2021
By Wahard Betha
ASX-listed Sovereign Metals says it has planned to start full scale graphite production at Malingunde in 2021 following completion of mining construction works which are expected to start in 2020.
In his presentation at the launching ceremony of the 2016/2017 Malawi Extractive Industry Transparency Initiative (MWEITI) report in Lilongwe, Sovereign Metals’ Country’s Director, Andries Kruger says mine construction will start at Malingunde after completion of technical studies, obtaining finances and mining license and establishing strong community support.
We are about to embark on discussions with finance providers to secure funding for the development and construction of the Malingunde project,
Kruger explains that Sovereign is currently in the middle of discussions with numerous end users and traders of graphite in preparation for the available graphite market.
He also says the company is advancing towards striking product transport and logistics agreements with service providers for easier transportation of the mineral deposits from the mine.
Sovereign is looking forward to completion of an infrastructure assessment program and of the Environmental and Social Impact Assessment (ESIA) which they described as currently well advanced and expected to be completed in early 2019.
We are in the final stages of Pre-Feasibility (PFS) and we plan to proceed to a Definitive Feasibility Study (DFS).
In a period of seven years of investment in Malawi, Sovereign has drilled over 40,000 metres at four deposits as part of exploration and has so far invested over US$15-million in the project, and expects to spend over US$5-million at Malingunde prior to financing.
Malingunde’s total investment upon project delivery is pegged at over US$70-million.
Sovereign completed a scoping study on Malingunde deposit in 2017 which delivered the world’s largest reported soft saprolite-hosted graphite resource with capital and operating costs per unit at the very bottom of the graphite supply cost-curve.
The results of the scoping study demonstrate the potential for the Malingunde Project to support a very low capital and operating cost operation with annual graphite concentrate production of approximately 44,000 tonnes over an initial mine life of 17 years.
The study results indicate that the project’s total operating costs of approximately US$301 per tonne concentrate (FOB Nacala Port) is at the very bottom of the graphite supply cost curve and the lowest of any reported ASX-listed peer company of scale <300ktpa.
The results also show that the total capital cost of US$29 million, (includes 35% contingency) for production of ~44,000 tonnes of concentrate per annum is the lowest capital intensity of all peers.
They demonstrate a very rare combination of low capital and operating costs for Malingunde at a realistic scale of production and a payback of under two years using conservative graphite pricing assumptions.
The results also indicate very low mining costs with the soft saprolite being free-dig with a low strip ratio of 0.5:1, and the project supports a simple process flow sheet with no primary crush or grind, leading to low processing costs and lower capital requirements.
The study shows that Malingunde will have simple plant design which uses “off the shelf equipment” allowing rapid and cost effective initial construction and future expansion options.
This piece was initially published in Malawi’s Mining & Trade Review Issue Number 67 (November 2018). This monthly publication is edited by Marcel Chimwala.