Australia’s Black Rock Mining Ltd has entered into a strategic alliance with Korea’s POSCO for the development of the world-class Mahenge project in Tanzania.

A memorandum of understanding signed by the two companies anticipates an initial investment by POSCO of up to US$10 million (A$14.3 million) by way of a subscription for shares and convertible notes in Black Rock.

The investment will be used to fund a program of engineering works including design, completion of contracts and early access to establish a construction-ready site at Mahenge by year end.

Black Rock managing director John de Vries said the POSCO agreement represents a “significant step forward” for Mahenge.

“POSCO has global scale and significant financial strength, and [this alliance] will significantly reduce our project’s offtake credit risk, which is a prerequisite to securing future debt financing,” Mr de Vries said.

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