Magnis Energy Technologies has executed a Binding Engineering, Procurement and Construction (EPC) contract with Metallurgical Corporation of China (MCC), to provide turn-key solution for a 240,000tpa graphite production facility at the Company’s Nachu Project in Tanzania.
|Signing Ceremony held at MCC headquarters in Beijing|
The previously completed Bankable Feasibility Study, including Front-End Engineering and Design (FEED) for the Nachu Project formed the basis of this work.
The contract provides a fixed price turn-key solution to produce high-purity graphite products and is inclusive of all items and inventory, including but not limited to the processing plant, infrastructure including roads, power, workers camps and storage facilities.
As per the EPC, the fixed price for the turn-key solutions is US$277 million, which is the complete cost for a 240,000tpa plant, including savings derived from the Special Economic Processing Zone license provided to the project.
The execution of the EPC contract is an important prerequisite in the application for project financing support from China Export Credit Agency. Funding applications and negotiations with the agency have already commenced, and concurrently Magnis and MCC are continuing further negotiations regarding the closure of residual project funding amounts, with the objective of minimising the equity portion required.
Initial meetings between all parties have targeted financing of no less than 80 per cent in debt or delayed payments, and to date this target seems achievable with final outcomes expected in the first half of 2020.
Vice President of MCC International, Mr Wang Zhou, commented that the Nachu project is very unique and is one of the most impressive graphite projects.
“In particular, our team has been very impressed with the high purity products it can produce, minus any purification,” said Mr Zhou.
“We believe we can assist with the funding of at least 80 per cent in debt funding or delayed payments and we look forward to working with Magnis in achieving a world class operating graphite mine.”
Magnis Managing Director, Marc Vogts believes the execution of the EPC contract with MCC demonstrates the quality of the project along with the significant progress made at Nachu this year.
“[The project] is shovel ready and Tanzania’s most advanced graphite project. With the ability to produce 99.95 per cent graphite purity via mechanical processes only, Magnis is in a unique position to become a leader in the production of anode materials for the rapidly growing battery market,” commented Mr Vogts.
MCC is the world’s largest metallurgical construction contractor and operation service provider and one of the state-recognised major resource enterprises. MCC is also one of China’s largest steel structure producers, one of the first 16 central SOEs with real estate development as its major business approved by the State-owned Assets Supervision and Administration Commission (SASAC) of the State Council, and the main contractor for China’s infrastructure construction.
With over 130,000 employees, assets of over US$50 billion and annual revenues exceeding US$28 billion, MCC is part of China Minmetals Corporation and is the nations’ largest mining and metals engineering and construction group, with extensive experience in the design, engineering, construction and operation of processing plants. As an innovation-oriented enterprise, MCC currently has 13 Class A scientific research and design institutes.