POSCO Group, South Korea’s major steel and battery materials conglomerate, is investing in Tanzania’s Mahenge Graphite Project, the world’s second-largest graphite reserve, to cut reliance on Chinese graphite imports. POSCO International Corp., the group’s trading arm, has agreed to acquire a 19.9% stake in Australia’s Black Rock Mining Ltd. for $40 million. Black Rock Mining holds an 84% stake in the Mahenge project, which is estimated to contain around 6 million tons of natural graphite.
POSCO Holdings Inc., the parent company of POSCO Future M, South Korea’s sole anode producer, aims to eliminate its dependence on Chinese graphite used in electric vehicle (EV) battery anodes. The company is also focused on securing other critical battery minerals such as lithium, cobalt, and nickel from alternative sources.
The investment is part of POSCO’s strategy to diversify its supply chain in response to the US plan to eliminate tax incentives for EVs with batteries containing Chinese graphite by 2027. POSCO International plans to secure an additional 30,000 tons of natural graphite annually from the Tanzanian mine starting in 2026, with the mine set to have an annual capacity of 89,000 tons, potentially increasing to 347,000 tons.
The deal includes rights for POSCO International to sell some of the graphite produced. The mine will supply both high-purity graphite for battery anodes and low-purity graphite for use in steel, cement, and auto parts. POSCO Group is also expanding its graphite supply chain through projects in Mozambique and Madagascar, and increasing its production of artificial graphite in South Korea. This investment is expected to meet a significant portion of POSCO Future M’s annual graphite needs of 120,000-200,000 tons by 2027.
South Korea’s Ministry of Trade, Industry and Energy has established a 5 trillion won ($3.7 billion) fund to support domestic battery materials manufacturers, providing financial aid such as low-interest loans to companies like POSCO Future M.
