Canadian mining company, Montero Mining & Exploration Ltd, is coming to Ethiopia to partner with local company, Hulager General Import & Export plc, to extract graphite from the latter's fully owned Moyale Graphite Project.
Hulager got the license for the mine from Oromia Mining & Energy Development Bureau not more than three months ago, according to a source in Moyale, after the bureau snatched the license from another company who had failed to being operation after getting the license. The Bureau sent a letter to the Moyale Woreda Mining & Energy Development ordering them to transfer the graphite mine, located at Arbele Kebele, to Hulager about two months and 20 days ago, according to an official.
Aregawi Kahsai, owner of Hulager, declined to comment on the issue, although Montero has posted on its website that it could claim as much as 80pc interest in the project in a number of years and following the completion of some reports. An official in the Moyale area also said that an expert from Hulager is currently down at the mine to conduct a study.
According to the deal between the two, Montero immediately gains a 51pc interest in the project, with the possibility of acquiring 29pc more in the future, Montero says on its website. The mine is located five kilometres from Moyale town.
As part of the deal, Montero will be able to complete legal and technical due diligence in six months. The 51pc interest has become immediately effective, says Montero, after it committed to complete a report, in compliance with the National Interest NI 43-101, in two years and for not more than 1.5 million US dollars. The NI 43-101 is a Canadian government requirement for mining companies trading on the TSX Venture Exchange or the Toronto Stock Exchange, requiring them to report and display "information related to mineral properties owned by, or explored by, companies which report these results on stock exchanges within Canada", according to information on Wikipedia.
After this first report, Montero could spend 10 million dollars more within three years to complete a feasibility study, after which it could acquire 29pc more interest in the graphite project.
"The Moyale Graphite Project has seen limited mapping, sampling and trenching in addition to limited geographic surveys, with no drilling conducted yet," says Tony Harwood (PhD), president and chief executive officer (CEO) of Montero, in a press release on the company's website on August 26, 2014. "Montero intends to define a high quality large flake graphite resource in compliance with NI 43-1001, whereby a long life mine plan is outlined."
Montero says it is a company "engaged in the identification, acquisition, evaluation and exploration of mineral properties, primarily focused on rare earth elements (REE) and phosphates in Tanzania and Ethiopia.
Graphite, a mineral made purely from carbon, is used for various purposes ranging from lubricants to foundry facing and steelmaking, as well as in batteries, brake linings and refractors, such as heat resisting materials.