EcoGraf Completes Environmental & Social Planning for Epanko Graphite Project

EcoGraf Limited (ASX: EGR) has successfully completed a comprehensive environmental and social planning update for its Epanko Graphite Project in Tanzania, marking a significant milestone in the project's development journey. This achievement represents the culmination of over A$3.5 million invested during the past two years to ensure the project meets world-class sustainability standards.

The environmental and social planning program was conducted in accordance with the Equator Principles, Global Industry Standard on Tailings Management (GISTM), and Tanzanian legislation—key requirements for advancing the project's financing process. Independent environmental and social consultants have reviewed and validated the company's Environmental and Social Management Plan (ESMP) as part of ongoing due diligence processes.

This milestone follows the recent granting of the Special Mining Licence (SML), which fully supports the initial 18-year mine life outlined in the current feasibility study, with the potential to extend to 25 years or beyond based on ore reserves.

Comprehensive Environmental Framework Ensures Sustainable Development

The environmental components of the program have established a robust framework for responsible development at Epanko. Key completed elements include:

• Extensive biodiversity surveys and critical habitat assessments, which confirmed the existing environment has been highly degraded due to subsistence farming and historical large-scale hardwood logging
• Detailed surface and hydrogeological modeling that demonstrates sufficient process water availability and enables effective water discharge management systems
• Tailings Storage Facility (TSF) evaluation and design by consultants Knight Piésold, incorporating additional data from the 2024 drilling program to ensure compliance with global standards
• Development of a conceptual mine closure plan to guide future site rehabilitation

The company has created a comprehensive set of environmental management plans covering critical areas such as air quality, water resources, biodiversity, waste management, and emergency response.

Community-Focused Social Programs Set New Standard

EcoGraf's social and community programs demonstrate a commitment to responsible development that benefits local stakeholders:

• Detailed surveying of households and landholdings to generate updated social data and fair compensation arrangements
• Establishment of Resettlement Working Groups in collaboration with the Epanko Village and government authorities
• Evaluation and selection of potential resettlement areas proposed by villagers, with assessment of housing and infrastructure requirements
• Completion of the Epanko medical dispensary, scheduled for handover to the community this month

The completed Resettlement Action Plan (RAP) valuation and compensation schedules have received approval from the Government Chief Valuer—a critical step toward implementation. To ensure proper execution, EcoGraf has appointed an experienced Manager to oversee the RAP implementation program, working alongside the Manager of Environment and Communities.

Understanding Equator Principles and Their Significance

The Equator Principles serve as a risk management framework adopted by financial institutions for determining, assessing, and managing environmental and social risks in project financing. Established in 2003 and currently in its fourth iteration (EP IV), these principles have been adopted by over 125 financial institutions in 40 countries, covering the majority of international project finance debt within developed and emerging markets.

The framework consists of ten principles that financial institutions apply to determine whether to provide financing:

1. Review and Categorisation: Projects are categorised based on potential environmental and social risks.
2. Environmental and Social Assessment: Comprehensive assessment of potential impacts.
3. Applicable Environmental and Social Standards: Projects must comply with host country laws and international standards.
4. Environmental and Social Management System: Developers must establish management systems for ongoing compliance.
5. Stakeholder Engagement: Effective engagement with project-affected communities.
6. Grievance Mechanism: Systems to address concerns from affected communities.
7. Independent Review: Third-party verification of assessment documentation.
8. Covenants: Legally binding commitments to comply with management plans.
9. Independent Monitoring and Reporting: Ongoing verification of compliance.
10. Reporting and Transparency: Regular public reporting on implementation.

For mining projects like Epanko, adherence to these principles signifies:

• Reduced financing barriers: Projects compliant with Equator Principles are more likely to attract international financing.
• Enhanced risk management: Systematic identification and mitigation of environmental and social risks.
• Improved stakeholder relations: Structured engagement with local communities and governments.
• Long-term operational stability: Fewer disruptions from community opposition or regulatory challenges.

By adhering to these principles, EcoGraf positions Epanko as an attractive, bankable project for international lenders who increasingly scrutinise ESG credentials. Understanding the JORC Code is another key element for investors considering mining projects like Epanko, as it establishes standards for resource reporting.

Future Development Timeline

With environmental and social work streams now complete and showing no impediments to development, EcoGraf is positioned to advance Epanko toward construction and production. Key upcoming steps include:

• Submission of an updated Environmental Social Impact Assessment summary to Tanzania's National Environment Management Council
• Implementation of the approved Resettlement Action Plan under newly appointed management
• Handover of the completed medical dispensary to the Epanko community
• Continued engagement with potential financing partners leveraging the completed environmental and social documentation

The project is expected to provide transformational economic benefits for the region, with opportunities for an estimated 4,500 indirect employees and generating a forecast of over US$9 billion in additional indirect economic benefits over the mine's life. Strategic investments in human capital in mining will be crucial for maximising these benefits as the project progresses.

Investment Thesis: Why Epanko Stands Out

Epanko represents a compelling investment opportunity in the critical minerals space for several reasons:

1. World-Class ESG Credentials: The completion of environmental and social planning to leading international standards positions Epanko favourably with investors and financiers who increasingly prioritise sustainability.

2. Strategic Resource: As a high-quality graphite project, Epanko is positioned to supply critical materials for the growing lithium-ion battery and electric vehicle sectors.

3. Vertically Integrated Business Model: EcoGraf's strategy includes not just mining at Epanko but also downstream processing through its Mechanical Shaping Facility and HFfree® Purification technology, potentially capturing more value across the supply chain.

4. Government Support: The granting of the Special Mining Licence demonstrates Tanzanian government backing for the project.

5. Economic Impact: The project's forecast of over US$9 billion in indirect economic benefits highlights its significance not just as a mining operation but as a regional economic catalyst.

Decarbonisation in Mining: Science-Based Targets will likely play an important role in EcoGraf's future development, as the company positions itself within the sustainable mining sector.

Why Investors Should Follow EcoGraf

EcoGraf has positioned itself at the intersection of two powerful trends: the global transition to electric vehicles and increasing emphasis on sustainable, ethically-sourced materials. With the completion of this comprehensive environmental and social program, the company has cleared a significant hurdle on the path to financing and developing Epanko.

The company's integrated approach—from mining high-quality natural flake graphite at Epanko to processing it into battery anode material using proprietary environmentally friendly technology—provides multiple potential revenue streams and competitive advantages in the growing battery materials market.

Digital transformation in mining will likely enhance EcoGraf's operational efficiency as the project moves forward, creating additional value for shareholders.

For investors interested in the critical minerals sector, EcoGraf offers exposure to the entire graphite value chain, underpinned by strong ESG credentials and significant progress toward production. As battery manufacturers increasingly seek secure, sustainable sources of graphite, EcoGraf's Epanko project represents an emerging opportunity in this vital supply chain.

Those investing in mining stocks may find EcoGraf's progress on environmental and social governance particularly attractive as ESG considerations become increasingly important to institutional investors.

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