Kibaran Resources Presses Ahead At Merelani

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Kibaran Resources Presses Ahead At Merelani
Merelani

By Alastair Ford

The Merelani graphite project in Tanzania isn’t exactly new. It was discovered several decades ago on a site not far from the town of Arusha in the north of the country and within sight of Mount Kilimanjiro.

But graphite markets have been fickle over the years, and although it was briefly mined, for a long time the graphite at Merelani was overshadowed by a more showy mineral that lay in deposits right alongside the graphite.

That mineral was tanzanite and it was central to the offering of the one-time Aim-traded company known as Tanzanite One, now known as Richland Resources, which held and mined the Merelani project throughout the last mining boom.

Times change. The tanzanite business has come unstuck in all sorts of ways, while graphite, after a long hiatus, has recently come back into favour. Enter stage left Kibaran Resources, the owner of the 22.7 million tonne Epanko graphite project in Mahenge province, also in Tanzania.

Kibaran has long experience in Tanzania, and even, in the shape of chairman John Park, some direct experience of Merelani itself.

The plan is to transform Kibaran from a single asset graphite play into a multi-asset graphite play, starting with the addition of TanzaniteOne’s graphite ground at Merelani, where the original mine was, to neighbouring licenses already held by Kibaran.

The deal is in place, but negotiations on getting it completed have been somewhat protracted as they involve a government parastatal as well as Richland’s local subsidiary TanzaniteOne Mining Limited.

The details of those talks are not known, but it is true to say that relations between TanzaniteOne and the government have been somewhat strained in recent years, and this may well be holding things up.

In its latest announcement on Merelani, Kibaran notes that the exclusivity period for the agreement expires at the end of February this year, but adds that it is in talks to get that exclusivity period extended.

The company has also revealed that recent drilling in the area has encountered extensive graphite mineralisation which appears consistent with

The potential benefits to Kibaran in acquiring additional ground at Merelani would be quite significant. Kibaran has already demonstrated its ability to forward sell graphite product from its projects, based on the large flake size that it is able to guarantee. Large flake graphite is at a premium, as it has greater conductivity.

Merelani has the potential to yield large flake graphite just as Epanko does, according to Kibaran, and the company has already set about putting in place sales agreements with traders and end users for Merelani product.

Already Kibaran has two buyers for the graphite it intends to produce. Under the terms of one of the deals it’s struck, around 10,000 tonnes are already linked to Merelani.

So the customer has seen the product and likes it. Now Kibaran has simply to secure the TanzaniteOne asset and get a mine into production. That won’t be easy. But so far Kibaran has ridden the Australian graphite boom well. All the signs are that it will continue to do so.

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