Tanzanite miner Richland Resources (LON:RLD) is considering re-opening its graphite mine in Tanzania to take advantage of the recent surge in the price.
Graphite has risen in price to over US$2,500 from US$480-US$550 per tonne when the Merelani graphite mine closed in 1998.
The mine is on the same site as Richland’s tanzanite operation and chief executive Bernard Olivier said that producing graphite may be a low cost source of revenue and cash flow.
A feasibility study is now underway to assess the potential synergies with the tanzanite operation, which is one kilometre (km) away from the historic graphite mine.
Before the mine closed in 1998, 8,000 tonnes of graphite were produced, while the site also had a historic non-JORC compliant resource of 25mln tonnes at 6.9% carbon and historic, non-JORC compliant reserves of 530,000 tonnes of graphitic carbon.
In addition, 6,000 tonnes of graphite carbon is available on-surface in the waste dump from the existing tanzanite mining operation.
The feasibility study will assess the graphite value in these tanzanite tailings as well as the viability of re-developing open-pit graphite operations.
Olivier added: “Located within our existing licence area, 1 km from current tanzanite mining operations, there are several potential partnerships available to develop both a tailings reclamation operation and restart the open pit graphite mining operation.
"Graphite is a specialist market and we have initiated a feasibility study, following on from discussions with parties interested in securing a long-term source of material. Our intention is to build shareholder value from a profitable production portfolio with minimal costs.”