Herbert Smith Freehills advises Korea’s POSCO Group on stake in Tanzanian graphite miner

Leading international law firm Herbert Smith Freehills has advised Korea’s POSCO Group on its acquisition of a 15% stake in ASX-listed Black Rock Mining Limited.

Black Rock Mining will use the funds from the transaction to develop the Mahenge Graphite Project in Tanzania.

Graphite demand and value are soaring due to the mineral’s use in lithium-ion batteries for electric vehicles, but it is also used in steel-making.

“Longstanding client POSCO is investing in a mineral essential for both its core steel-making business and the company’s development of new metals and components for electric vehicle batteries business,” said Perth partner Simon Reed, who led the team advising POSCO.

“Tanzania has the world’s fifth-largest reserves of graphite; this investment will help kick-start production for Black Rock Mining, one of a number of new graphite mines expected to come online in the country in the near future,” said Asia Head of Mining Andrew Blacoe.

The firm is also advising POSCO on offtake and prepayment arrangements for the project. Completion of the transaction is conditional on approvals by Tanzanian and Australian regulators and Black Rock Mining’s shareholders.

Simon was assisted by senior associates Sevan Gore and Michael Denny in Perth, and by counsel Ken Nam in Seoul. Director Patrick Leyden in Johannesburg also helped to liaise on Tanzanian due diligence issues.