Comparative Analysis of Tanzania’s Graphite Projects with Leading Graphite-Producing Countries
As the global demand for electric vehicles (EVs) surges, the critical role of graphite in lithium-ion batteries propels it to a strategic position in the market. With its substantial graphite deposits, Tanzania is well-positioned to emerge as a key player in fulfilling this growing need.
The future of electric cars hinges on the continuous supply and accessibility of essential materials like graphite, which forms the anode of lithium-ion batteries, facilitating efficient energy storage and delivery. With automakers and governments worldwide accelerating towards a greener, electrified automotive landscape, the relevance and value of graphite are set to soar.
This transition not only underscores the pivotal role of graphite in advancing the electric vehicle narrative but also heralds a promising economic prospect for graphite-rich regions like Tanzania.
The global shift towards electric mobility is not merely a technological evolution but an economic opportunity for resource-endowed areas to participate in a worldwide movement towards a sustainable and electrified automotive landscape.
The convergence of technology, natural resources, and global market dynamics renders the narrative of graphite and electric vehicles an exemplar of how strategic minerals can fuel the drive towards a greener future, with Tanzania potentially playing a crucial role in this global endeavour. This article compares Tanzania’s graphite projects with those of other leading graphite-producing countries and offers suggestions for Tanzania to maximize the benefits of the EV mineral rush.
A Comparative Overview: Tanzania
- Reserves and Projects: Tanzania hosts substantial graphite deposits, particularly in its central and southeast regions, with active projects like Bagamoyo, Bunyu, Chilalo, Epanko, Nachu, and Lindi Jumbo yet to reach production stages. Australia-based firms are propelling these, including Black Rock, Mining, EcoGraf, Evolution Energy Minerals, Magnis Resources, Volt Resources, and Walkabout Resources.
Extending over 180 hectares, the Bagamoyo Project initiated exploration activities in January 2023. Bunyu, owned by Volt Resources, stands as Tanzania’s largest graphite resource, boasting 461Mt at 4.9% TGC and a reserve of 127 Mt at 4.4% TGC, with a two-stage development strategy underway to bolster its annual throughput rate to 400,000 tonnes of ore
- Production Capacity: Although Tanzania has significant reserves, its production and export quantities are still developing. Tanzania holds a substantial share of the world’s graphite reserves, contributing about 5% of global graphite reserves. The estimates from 2020 indicate that Tanzania had graphite reserves amounting to 17 million tonnes out of the total global resources estimated to be 323.8 million tonnes.
- Policy Landscape: The country has had a somewhat tumultuous mining policy landscape, with revisions in mining laws in recent years that increased government stakes in mining projects and royalties. The most recent amendments to Tanzania’s mining sector include four fundamental regulatory changes enacted in February 2019, all relating to the country’s Local Content Regulations. The Local Content Regulations follow the Mining Act, 2010 amendments through the Written Laws (Miscellaneous Amendments) Act, 2017, which introduced the local content requirements.
Local content regulations now require that at least 20% of a mining company operating in Tanzania be owned by Tanzanian citizens, down from 51% previously (as stipulated by the Mining Local Content Regulations introduced in 2018).
Other requirements for an entity to qualify as an indigenous Tanzanian company remain the same (the company must be incorporated in Tanzania, Tanzanian citizens must hold at least 80% of its executive and senior management positions and 100% of its non-managerial and other positions).
Regarding financial services, a contractor, subcontractor, licensee or other allied entity is still required to retain only the services of a Tanzanian financial institution or organization.
China
- Reserves and Projects: China is the world’s largest producer, contributing to over 60% of global production. The deposits are widespread across Heilongjiang, Shandong, and Hunan provinces.
- Production Capacity: China’s expansive mining operations have positioned it as the market leader in natural and synthetic graphite production.
- Policy Landscape: The Chinese government has implemented a conservation policy, placing restrictions on graphite mining and encouraging value addition within the country.
Brazil
- Reserves and Projects: Brazil hosts large flake graphite projects, most notably in Minas Gerais, with companies like Nacional de Grafite leading the charge.
- Production Capacity: Brazil consistently ranks among the top global graphite producers, mainly producing crystalline and amorphous graphite.
- Policy Landscape: Brazil has a more liberal mining regime, which has attracted foreign investments in its graphite sector.
Canada
- Reserves and Projects: While Canada’s deposits are substantial, they are smaller than those of China and Brazil. Notable projects include the Lac Guéret project in Quebec.
- Production Capacity: Several Canadian projects are in advanced exploration or early development stages.
- Policy Landscape: Canada offers a transparent and stable mining regulatory framework, making it an attractive destination for mining investments.
What Can Tanzania Learn From Leading Producers?
Learning from leading producers like China could provide valuable insights to maximize this opportunity. One key lesson is “encouraging value addition” and mineral processing within the country. This approach could significantly increase the economic benefits derived from graphite resources. Value Addition could include:
- Processing Plants: Establishing processing plants in Tanzania to convert raw graphite into higher-value products, such as battery anodes, is essential. This mirrors China’s strategy, where local processing has been focused on maximizing value retention within the country.
By processing locally, Tanzania can capture a larger share of the value chain, which is crucial as the demand for high-grade graphite, particularly in EV (Electric Vehicle) batteries, continues to soar globally.
- Skill Development: Investing in training programs to upskill the local workforce is pivotal. This will equip individuals with the necessary processing and quality control skills, ensuring that the graphite products meet the global standards required by various industries. A skilled workforce is a cornerstone in developing a sustainable and competitive graphite industry.
- Research Institutes: Collaboration with or the establishment of research centres focusing on graphite applications and innovations is another avenue to explore. These institutes can work on advancing the understanding and utilization of graphite, fostering innovation, and developing new technologies for graphite processing and applications. This will improve the efficiency and quality of graphite processing and position Tanzania as a hub for research and innovation.
As a leading graphite producer with a production of 850,000 MT in 2022, China has well-established port facilities to handle the export of such a significant amount. China’s substantial export capacity indicates a robust port infrastructure equipped with modern facilities to cater to the demands of the global market.
By examining China’s “port development” strategies, Tanzania can glean insights into enhancing its port facilities to cater to the exports better. This includes learning from China’s handling equipment upgrades, storage capacity expansions, and logistics optimization measures to ensure a smooth and efficient export process. Port Development should consist of:
- Enhancing port facilities: a pivotal measure to streamline export, especially in a global market where timely delivery is crucial. A well-structured port infrastructure facilitates smoother trade operations, making Tanzanian graphite more accessible to international markets.
- Storage Capacity: Increasing storage capacity at ports is crucial to handling larger volumes of graphite, ensuring that the supply chain remains uninterrupted. Adequate storage facilities will securely hold substantial amounts before shipping, reducing potential delays and associated costs.
- Handling Equipment: Upgrading equipment for efficient loading and unloading is essential to expedite export. Modern handling equipment can significantly reduce load and unloading graphite time, ensuring that shipments are dispatched and received on schedule.
- Logistics Optimization: Optimizing logistics operations within and around port facilities is crucial to ensuring a seamless flow of goods. This involves coordinating with transportation providers, streamlining customs procedures, and employing modern logistic solutions to track and manage shipments efficiently.
A robust infrastructure facilitates efficient operations from extraction to the export of graphite. Thus, Tanzania should prioritize constructing and maintaining roads and rail networks leading to graphite mines.
This would ensure easier and cost-effective transport of materials to processing facilities and ports, reducing logistical bottlenecks and operational costs. A well-connected transport network is foundational for a thriving graphite industry.
By concurrently advancing in these infrastructure domains, Tanzania can create a conducive environment for the growth and sustainability of its industry. This integrated infrastructure development approach can significantly reduce operational hurdles, improve efficiency, and ultimately position Tanzania as a reliable and competitive player in the global graphite market.
Through these strategic infrastructure enhancements, Tanzania can substantially elevate its graphite industry to meet the burgeoning global demand, particularly from the electric vehicle and renewable energy sectors. The global shift towards electric vehicles presents a golden opportunity for Tanzania.
With its abundant reserves, Tanzania has the potential to play a significant role in the EV mineral supply chain. By adopting forward-thinking strategies and building robust partnerships, Tanzania can ensure it fully benefits from the EV mineral boom.
Based on its production, read Tanzania’s Graphite: The Investment and Geopolitical Landscape.
