Sample of the Graphite that has been transported from Kitgum for China to undergo testing. Photo credit. Internet
By Brian Komakech
Gulu: Blencowe Resources PLC, a UK firm licensed to mine graphite from Orom East Sub-county in Kitgum district in Northern has announced the shipment of 600 tons (600,000 kgs) of raw graphite samples from the Orom-Cross graphite site to China.
According to the firm, the bulk sample of the graphite crucial in the global energy transition was mined from the Orom-Cross graphite site in late 2023. The delivery adds to the 100 tons (100,000 kg) of graphite that was already mined from the site and delivered for testing in the northeastern Chinese province of Jilin.
But the development comes amid protests from political and traditional leaders in Kitgum district who accuse the firm of working in isolation.
To that effect, the Kitgum District Local Government following a council resolution suspended the operations of Blencowe Resources Ltd in December 2023 from their district until further notice.
Blencowe Resources PLC took over the Orom Cross-Graphite project in April 2020 from Consolidated African Mineral Resources Co. Ltd, an Australian Firm granted a 21-year-long mining license by government.
Christopher Obol Arwai, the Kitgum District Chairperson told GNNA in an interview Monday that they suspended the operations of Blencowe Resources PLC over their lack of cooperation with the local government.
Arwai noted that in 2023, the firm notified the district about their intention to ferry about 100 tons of graphite samples for testing, but they were surprised that more samples were taken without any further update.
“They initially told us they would take out 100 tons. The only unfortunate bit is that when they started removing the sample, they didn’t update us. When we realized it, we went to the ground but found no activity, they seemed to have ferried that much sample,” said Arwai.
He said the district hadn’t yet signed an earlier Memorandum of Understanding (MoU) with the firm arguing that it was under review since some terms between the district and Blencowe weren’t clear.
“There was a lack of communication, every stage requires an update that we are going to carry out this activity, you can’t just go incognito and carry on with your operations without the district knowing. This was a big breach that needs to be rectified,” he said.
According to Arwai, Kitgum District local government is demanding clarity on the nature of the arrangement between the firm and the local community, terms of corporate social responsibility, terms of work with the district, and transparency in business dealings.
However, in an exclusive interview, Nabil Alam, the Country Manager (Uganda) of the Orom-Cross Graphite project told GNNA that the agreement with the local community was properly and legally signed, following all protocols of the Locomo land owners’ association.
Under the Lucomo land owner’s association, at least 289 households have been identified as Project-Affected Persons (PAPs). They occupy the villages of Nagolopak, Lobale, Locomo Central, and Loperu all in Akurumou Parish in Orom East Sub-county, located two kilometers from the Orom-Cross graphite project site.
Alam noted that through the Land Lease Agreement, the firm is paying a fee to the local community for rights to mine in the area although no mining activity is currently happening.
Why were bulk samples shipped?
Alam noted that the bulk samples taken from the site were mainly for testing for designing a plant.
“It is essential to analyze the graphite in great detail to design the plant facilities and set up the end market (the eventual buyers of the graphite). To obtain offtake agreements, we must send physical samples of our material to the end buyers for evaluation,” said Alam.
He said China holds a virtual monopoly on the supply of graphite worldwide and therefore holds a wealth of expertise and facilities that they need to build the most efficient mining project.
The quantity exported however is expected to yield an anticipated 30 tons of graphite for the firm once the processing is complete from China.
Blencowe Resources PLC is currently undertaking a Definitive Feasibility Study (DFS) in Orom to determine whether the mineral resource can be mined economically.
Alam said the firm anticipates the final DFS will be completed towards the 3rd Quarter of this year whereupon they will be in a position to decide on mining and setting the pace for the beginning of the construction phase. The construction phase is expected to begin at the end of 2024.
Mike Ralston, CEO Blencowe Resources PLC, however, noted that the most important aspect within the DFS is the offtake which one has to complete to secure offtake contracts and ultimately get a project contract.
“It’s a complicated prequalification process, fortunately, we are dealing with experts who have been in this exact process and they are able to guide us through the processes and are much more streamlined and quicker than some who have done in the past,” he said in a recorded interview published on the firm’s official website in October 2023.
Ralston said once the firm is done with the 600-ton box samples test sample program in China, they will be ready to show any Original Equipment Manufacturer (OEM) the high quality of what they have (99.95) purified product and ultimately get the contracts.
Funding available
In 2023, the firm revealed that it required an initial capital of USD 62m (Shs239b) for the Orom-Cross Graphite project.
GNN however understands that the firm has also raised its operational funding through the stock markets and its shareholders. He didn’t however reveal the amount so far raised.
In addition, the firm has also received funding from the United States Development Finance Corporation to accelerate the path to production.
In January 2024, Blencowe Resources PLC received its second portion of the USD1m funding payment from the United States International Development Finance Corporation.
The fund now represents a further 20 percent of the full USD 5m grant to be utilized for Orom-Cross Definitive Feasibility Study (DFS) costs.
Alam said once the DFS is completed the requisite funding arrangement will be announced.
Compensation to Land Owners
Vincent Kedi, the Assistant Commissioner of Licensing and Administration in the Minister of Energy and Mineral Resources told GNNA reporter in an earlier interview in November 2023 that the government had already started the process of compensating the 289 Project Affected Persons (PAPs).
The first batch of compensation of Shs 200m was deposited into the PAPs’ bank account under the Lucomo Land Owner’s Association in 2020. The second batch of compensation totaling Shs 665m was meant to be disbursed by the government by late 2023.
According to Blencowe Resources, graphite deposits at Orom are so far the largest in the world by size and scale of deposit with an estimated quantity in the range of two to three billion tons.
Products made from Graphite
They include: pencil lead, brake linings for large non-automotive vehicles, batteries, laptop components, paint, electric motor brushes and crucibles. Crucibles are containers used to hold extremely hot fluids and liquids in forging and other high heat applications.
