Shandong Yulong has also been selected as the Company’s preferred Chinese debt arranger, for which discussions are progressing well as the Company moves towards construction at Ancuabe.
Mr Peng (Rod) Zhang has been appointed as Executive Chairman (from non-executive Chairman) to drive the development of Ancuabe.
To drive the development of the Ancuabe Graphite Project towards construction, the Company has appointed Mr Peng (Rod) Zhang as Executive Chairman (from non-executive Chairman). The material terms of this appointment are included in the appendix to this announcement.
About Shandong Yulong Gold Co., Ltd.
Shandong Yulong Gold Co., Ltd., established in 1999 and registered in Jinan High-tech Zone, is a company listed on the main board of Shanghai Stock Exchange (stock abbreviation: Yulong Stock, stock code: 601028). Shandong Yulong is primarily engaged in the trading of minerals, nonferrous metals, coal, chemicals and other bulk commodities. In addition, it is an active explorer across a range of minerals and is committed to becoming a high-growth international mining company with a global vision. Jinan Hi-tech Holding Group holds 29% of Shandong Yulong.
We know that Adrain Costellos has been spending a decent amount of ime in Mozy re-establishing a team to effect the Ancuabe development.
Representatives of the Company, proposed cornerstone investor Shandong Yulong (who have throw in 8.5 M I believe) and a major Chinese mining contractor visited the site of the Ancuabe Graphite Project and the proposed port (Pemba). Trip was focussed on project execution planning and incountry establishment works, community and government engagement.
Major Chinese mining contractor
Front End Engineering Design (FEED) contract awarded – subsequent to quarter end, Yantai Oriental Metallurgical Engineering Co Ltd awarded the contract for FEED works for the processing plant and associated non-processing infrastructure for the Ancuabe Graphite Project
FEED works to be completed in Q2 CY2023, with the aim of enhancing the design of the processing plant, thereby reducing risk and targeting a reduction in the associated capital expenditure.
Front End Engineering and Design
Shortly after the end of the quarter, Yome were awarded a contract in relation to Front End Engineering Design (FEED) for the process plant and associated non-process infrastructure for the Ancuabe Graphite Project.
The appointment of YOME as FEED contractor followed an extensive process to procure a contractor with suitable experience and capabilities to complete the FEED process and included a site visit by associated company Jinpeng to the Ancuabe Graphite Project. As part of the site visit tour, Jinpeng invited members of the Triton operations team to the 1.5Mtpa Nipepe Graphite Project located in the Niassa Province of Northwest Mozambique, where Jinpeng is currently undertaking the supply and installation of the process plant equipment.
This site visit provided Triton with an elevated level of confidence in Jinpeng’s/YOME’s ability to operate successfully both in East Africa and in the graphite sector. YOME will undertake the FEED work this quarter with the aim of enhancing and improving the design and efficiencies in the processing plant, thereby reducing risk and targeting an improved EPC tender price for the construction of the processing plant and non-process infrastructure. This scope of work represents a key step in the Ancuabe Graphite Project’s development and construction pathway. The FEED works will be undertaken with the support of Perth based Verum Projects and Engineering which will continue in its role as process consultants.
Country Visit with delegation from Triton, Shandong Yulong and Yantai Jinpeng Mining Machinery Co., Ltd During the quarter, a country visit was undertaken by representatives of both Triton and proposed cornerstone investor Shandong Yulong, focused on project execution planning and in-country establishment works for Ancuabe Graphite Project. The delegation also included representatives from YOME. The delegation visited the Ancuabe Graphite Project site and also the proposed port, the port of Pemba, which is located approximately 85km east, primarily via sealed highways.
Triton is pleased to advise that the Company has successfully re-established the project office and team in Pemba. A community engagement event was held in Pemba, which included representatives from local government, contractors, suppliers and the local community. As part of early contractor engagement process, the delegation also engaged with contractors, suppliers and members of the local business community in both Pemba and Maputo.
Also,a number of successful meetings were held with government officials and departments such as INAMI, Governor of the Cabo Delgado Province and the Ancuabe District Administrator.
The Company continues to investigate funding options for the development of Ancuabe, including debt, equity and equipment supplier arrangements.
Triton’s proposed cornerstone shareholder, Shandong Yulong, has also been selected as the Company’s preferred Chinese debt arranger. Triton is engaging with Chinese investment funds and agencies which may be able to provide debt funding at competitive rates. Access to Shandong Yulong’s resource integration advantage within China for potential funding, offtake and other development initiatives provides Triton with the potential of fast tracking the Ancuabe Project into development.
Nicanda Hill (EL5966) - As previously advised, the Company was advised that the area of the Nicanda Hill licence was reserved for public tender. This was notwithstanding the best efforts of the Company to have the Nicanda Hill licence renewed. Triton through its advisers in Mozambique has appealed to the Minister and other relevant authorities. Triton is making every effort to obtain a renewal of the licence and will keep the market updated in this regard.
EL5305, EL5380, EL5365 and EL5304 - In relation to these concession Triton’s wholly owned subsidiary, Grafex Limitada, remains listed as the holder of these tenements on the Cadastre. However, given the time involved in the consideration of the various extension/modification applications lodged by Grafex in relation to these tenements, the Company has commenced with its advisors the process of making fresh applications over the areas the subject of these tenements, regarding this as the best way forward. The Company will continue to review these tenements going forward, in the context of its focus being firmly on the development of Ancuabe and securing the return of Nicanda Hill.
Critical minerals arms raceAs mentioned China mines about 80% of the world’s graphite. The country also makes nearly 100% of graphite anode material.The fact that the US currently has no domestic graphite production means that graphite could easily become part of the escalating conflict between the United States and China regarding critical minerals.The United States looks to have taken a giant leap in this arms race in late March with the signing of a cooperation agreement with Japan covering various minerals for electric car batteries.Under this swiftly negotiated agreement, the US and its Asian ally will refrain from imposing export duties on lithium, cobalt, manganese, nickel and graphite.Washington is also close to striking a similar deal with the European Union after the two sides entered talks last month, according to reports. A draft of the agreement, as seen by Bloomberg, currently lists cobalt, graphite, lithium, manganese and nickel, mirroring that of the US-Japan deal.Another country eager to capitalize on the IRA benefits is Indonesia, which is reportedly looking at a limited free-trade agreement for some minerals shipped to the US to help its companies serving the EV battery supply chain. The Southeast Asian nation currently boasts the world’s largest nickel reserves.China, meanwhile, has made it increasingly difficult for the West to access its raw materials through stringent export restrictions.These restrictions — most frequently taxes, but also quotes — have increased more than five-fold in the last decade to a point where 10% of the global value of exports is subject to at least one measure, according to an OECD report.There are already fears that China’s export policy could extend to an outright ban on some minerals, in particular rare earths, of which it is by far the world’s largest producer.Rumblings of a China ban on rare earth exports first emerged in 2019, which caused angst among Western powers, pushing them to consider other sources of supply and establish new partnerships. And while it has been “all talk, no action” since, China’s threat remains a ticking time bomb.Things could be heading in a precarious direction, following Washington’s recent decision to impose restrictions on exports of high-end semiconductors to Beijing. Reports are coming out that China is now considering the possibility of banning certain rare earth magnet technology exports.The motive behind the United States trade strategy is well-documented — to shed itself of dependence on China while loosening the grip its main rival has on the global supply chain of critical minerals.When it comes to raw materials for the electric vehicle industry, China is undisputedly the most dominant force on the planet.For example, almost every metal used in EV batteries today likely comes from there, either mined or processed. Thanks to its technological prowess in refining, China has established itself as the leader in the battery metals processing business (see below)
The plant positions Syrah as an alternative supplier of graphite anode material to the US and Europe, which currently rely on supplies from China.
Syrah has a firm offtake deal with Tesla Inc for the supply of 8,000 tonnes of graphite anode material from the first phase of the Vidalia plant and an option for an additional 17,000 tonnes after the plant’s planned upgrade to 45,000 tonnes annual output.
