POSCO to Invest in Tanzanian Mine to Reduce Dependence on Chinese Graphite Imports

POSCO Group, South Korea’s leading steel and battery materials conglomerate, is poised to invest in Tanzania's second-largest natural graphite reserve, a project developed by an Australian firm, to decrease its reliance on Chinese graphite imports, according to Media report. POSCO International Corp., the group’s general trading arm, has agreed to acquire a 19.9% stake in Black Rock Mining Ltd. for $40 million. Black Rock Mining is advancing the Mahenge Graphite Project in Tanzania, where it holds an 84% interest in the project, which is estimated to contain around 6 million tons of natural graphite.

POSCO Holdings Inc., the parent company of POSCO Future M Co., South Korea’s sole anode producer, aims to eliminate its dependence on Chinese graphite, which is used in electric vehicle battery anodes. This investment aligns with POSCO’s broader strategy to secure critical battery minerals like lithium, cobalt, and nickel from alternative sources. The U.S. plans to end tax incentives for EVs equipped with batteries containing Chinese graphite starting in 2027, further motivating POSCO’s shift.

POSCO Chairman Chang In-hwa emphasized the group's commitment to enhancing the global competitiveness of key national industries, including secondary battery materials. He also noted the company's intention to leverage its diverse business portfolios and global networks to strengthen supply chains for national security.

South Korea, home to major global EV battery manufacturers such as LG Energy Solution Ltd., SK On Co., and Samsung SDI Co., relies heavily on raw materials from China, with approximately 90% of its graphite imports coming from the mainland. POSCO International’s investment in Black Rock Mining is set to secure an additional 30,000 tons of natural graphite annually from the Tanzanian mine. This investment includes participation in the second phase of the project, having already committed to the first phase in May 2023 with a 25-year agreement for the same volume. The graphite is scheduled to be procured starting in 2026, coinciding with the mine’s planned start of operations, which will initially have an annual capacity of 89,000 tons, with plans to expand to 347,000 tons.

According to the KED global report, the deal also permits POSCO International to market some of the graphite, with the mine producing both high-purity graphite for battery anodes and lower-purity graphite for steel, cement, and automotive parts. POSCO International has secured rights to sell the lower-purity graphite globally, while POSCO Future M will utilize the high-purity graphite.

To diversify its graphite sources, POSCO Group is investing in mining projects across Africa, including Mozambique and Madagascar, and is increasing production of artificial graphite in South Korea. These efforts are expected to fulfill a significant portion of POSCO Future M’s anticipated annual graphite requirements of 120,000-200,000 tons by 2027, according to the KED global. Additionally, South Korea supports domestic battery materials manufacturers through a 5 trillion won ($3.7 billion) fund established by the Ministry of Trade, Industry, and Energy, which provides financial support such as low-interest loans to companies like POSCO Future M.