ASX-listed Walkabout Resources has started concentrating ore at its Lindi Jumbo graphite mine, in Tanzania, with commissioning activities continuing to ramp up.

The mine is poised to become one of the top five natural graphite producing mines outside of China and the first new major mining project to enter production in Tanzania in more than a decade.

The company confirms that ore has successfully moved through the concentrating circuit to produce an unscreened wet concentrate. The plant has a design capacity of 40 000 t/y.

Problems with the consistency of fuel supply to the burner that will generate heat for the rotary dryer has, however, slowed commissioning progress of the back-end plant.

Walkabout says a representative of the company that manufactured the burner and carried out its factory acceptable testing is on site and will oversee the commissioning of the burner and necessary training of the responsible operations team.

The successful commissioning of the back-end plant will allow for the wet commissioning of the screening and bagging units.

Once the dryer is brought up to expected performance levels and the circuit runs in its entirety, plant throughput can increase significantly and consistently.

Owing to unforeseen delays in approvals from the Tanzanian Mining Commission, Lindi Jumbo is yet to award a fuel supply contract and is currently dependent on temporary fuel supply arrangements that have a higher risk of disruption from poor weather or unreliable supply.

Without the requested permanent fuel infrastructure established at site, the mine has experienced some fuel shortages over the past month and is actively engaged with the Mining Commission to expedite the approval process for an acceptable long-term arrangement.

From a funding perspective, Walkabout says until sufficient cashflow from product sales is available, the operating costs of Lindi Jumbo are being funded from a senior debt facility, with a final drawdown of $20-million having been made in March.

Another standby facility of $5-million remains available if required and can be drawn before the end of September.

Walkabout ultimately aims to ramp up production rates to the 40 000 t/y design capacity within four months.

Once throughput levels are sustained, the company will focus on grade and flake size distribution optimisation to ensure the plant performs according to its design parameters.

After this has been achieved, Walkabout’s metallurgical team at the mine will seek to improve the processes related to recoveries.

Meanwhile, the high-grade run-of-mine stockpiles of material have increased by about 15 000 t of free-dig graphite ore, bringing the total ore stockpile as of May 2 to 34 000 t, which is more than a month’s supply for the plant at nameplate capacity.

With Lindi Jumbo’s production being unpriced, it will capture full value from the current market shortage.

Walkabout MD and CEO Andrew Cunningham says the project is the culmination of more than six years of feasibility, procurement, engineering, construction and commissioning work undertaken by the project team and its contractors.

He adds that the first concentrate milestone was achieved with a strong focus on safety, capital cost control and partnering with the local community.

As noted by others within the industry, market conditions for coarse flake natural graphite are positive, with constrained global supply and relatively stable demand conditions leading to price support.

Coarse flake, which will contribute about 88% of Lindi Jumbo’s expected revenue, has not been as impacted by the supply pressures experienced by fine flake graphite producers.

Moreover, little to no product substitution can occur from synthetic graphite in the applications undertaken by the end-users of Lindi Jumbo’s coarse flake graphite.

Coarse flake pricing remains lower than the long-term average; however, in recent months, Walkabout has observed firming in both Chinese and global pricing for larger flakes. With State priorities in China focussed on fine flake production, less coarse flake is available for the many industrial applications outside of battery anodes.

With significant price decline in small flakes, some mines in China have been slow to resume production after the winter shutdown this year. As a result, production of large flakes also declined despite large flake prices having been stable or in some instances rising. It is against this supply pressure that Lindi Jumbo seeks to place its coarse flake product.

Lindi Jumbo graphite comes to the global market at an interesting time, says Cunningham, explaining that the project’s natural graphite provides customers with a supply chain alternative that is produced outside China and can also support battery makers to meet obligations under both the US Inflation Reduction Act and the European Union Critical Raw Materials Act.

Additionally, China, as a recent net importer of course flake graphite, remains an important source of new demand.