Global Metals and Mining has signed a $10 million (about K17.5 billion) loan agreement with South Africa-based Industrial Development Corporation (IDC) to finance phase one construction of its Kanyika Niobium Mine in Mzimba District.
The deal will see IDC, which is owned by the South African Governmen, own 19.9 percent equity holding in the mining firm, according to the non-binding term sheet the two companies signed recently.
Among others, the loan will fund completion of an updated bankable feasibility study (BFS) completion of the detailed front-end engineering design (Feed) and certain pre-implementation activities for the project early works.
Reads the agrement: “IDC will have the right to convert the loans into shares in Project HoldCo after completion of the BFS, Feed and early works and thereafter have the right to convert its shares in Project HoldCo into Globe.
“It is proposed that IDC will provide Project HoldCo with a secured convertible loan, available partly in 55 million rand [about K5.1 billion] and $7.05 million (K12.3 billion), to fund completion of the BFS, Feed and early works,” it said.
Global Metals and Mining chief executive officer Paul Smith said the loan will come in four tranches of $2.8 million in May, $2.4 million in July, $4 million in August and $749 000 in September 2025.
He said the term sheet allows IDC the conversion of debt for up to a 25 percent equity interest in the Malawi project holding company, with a second conversion option for up to a 19.9 percent equity interest in the listed entity.
Said Smith: “This financial support will allow us to execute crucial components of Kanyika’s development plan, headed by completing an updated bankable feasibility study.
“With the support of IDC and the announced debt financing from Ecobank Malawi, we have now locked in around 54 percent of the necessary funding for phase one development of Kanyika, which we anticipate will commence in the first half of calendar 2025.”
Kanyika phase one development will need $46 million (K80.5 billion) funding and this $10 million loan adds the available financing to $25 million as the firm already signed a $15 million loan with Ecobank Malawi in July 2024.
In a virtual investor presentation last month, the Australian Stock Exchange-listed company said the Environmental and Social Impact Assessment (Esia) report for the refinery plant construction will be released by the end of this year.
The presentation, which outlined project implementation timelines after the 15-month phase one construction, indicates that the company will rollout at 10 percent of full production until the $250 million (about K437.7 billion) phase two construction is completed in the third quarter of 2028.
In an interview, geologist and mining consultant Ignatius Kamwanje described Global Metals progress as impressive, saying if the pace the country registered this year in the mining sector is maintained, three big mining companies could be operational by 2026.
“If we are talking about Global Metals in 2026, it means we will have at least three companies operating by that year, including Lotus Resources Limited and Lindian Resources Limited, which will be a significant contribution to the country’s economy and foreign exchange,” he said.
Commenting on the new developments, geologist Grain Malunga attributed the company’s initial rollout delays to the refinery plant project located in Lilongwe, which required its own feasibility study.
He said now that the company has released its rollout timelines, including the refinery plant Esia report, it means by 2026 it will start contributing to the country’s gross domestic product.
He said: “This project was complex although its mining development agreement was signed some two years ago.
“It had to involve many stages mainly because Global Metals wanted to do the refinement in Lilongwe and not in Namibia.”
Kanyika Niobium Mine has the potential to become the first new globally significant niobium mine in 50 years, with an average production of 3 267 metric tonnes per year of niobium pentoxide and 136 tonnes per year of tantalum pentoxide over 27-year mine lifespan.
