Black Rock Mining has announced the approval of a $53.4m ($81.33m) loan from the Industrial Development Corporation (IDC) to fund its Mahenge Graphite Project in Tanzania.

The loan is a significant step towards the full financing of the project, which is expected to commence production in 2026.

IDC's senior-term loan is set to be part of the project's debt facilities for Mahenge, and the finalisation of the loan is contingent upon the documentation of definitive agreements.

The loan from IDC, combined with a previously approved $59.6m senior loan from the Development Bank of Southern Africa, is anticipated to constitute a $113m term loan package for the project.

Loan terms are yet to be finalised, but the expected tenure is seven years.

Black Rock Mining is now focused on documenting full form facility agreements and confirming the final structure of the Mahenge project's debt package.

The terms and conditions for such facilities are typical for this type of financing. However, there is no certainty regarding the conditions that potential lenders may impose or whether facility agreements will ultimately be executed.

The funding strategy for the project includes a mix of debt and equity to start production.

On 4 September 2023, Black Rock entered a memorandum of understanding (MOU) with its Strategic Alliance Partner, Posco International.

The MOU outlines a potential cornerstone equity investment of up to $40m in Black Rock.

Final approvals for this investment are expected in the near term, which will further bolster the project's financial position.

The company has set its sights on achieving first production from Module 1 of the Mahenge Graphite Project by 2026.