Mkango Resources Limited-owned Songwe Hill Rare Earth Project has received a boost as the US Government-owned International Development Finance Corporation (DFC) has agreed to a $4.6 million (K9 billion) funding for the project in Phalombe District.
The injection comes 15 months after Mkango Resources through its subsidiary Lancaster Exploration Limited in July last year signed a mining development agreement (MDA) with Malawi Government, which owns a 10 percent stake.
In an update, the company said the deal is expected to fast-track its mine construction by funding some key activities.
“The funds are expected to support project development activities in the form of front-end engineering design and value engineering studies,” reads the update in part.
The funding is to be equally matched by Lancaster’s contributions over the next 18 months and could be repaid to DFC only if, within 10 years of the signing, the former obtains financing enough to initiate construction, operations or other components of the project.
Mkango Resources Limited president Alexander Lemon is quoted in the update as having said that the DFC’s funding will fast-track development of the Songwe Hill Rare Earth Project.
The DFC’s funding deal comes a month after the European Union (EU) Commission identified Songwe Hill Rare Earth Project as one of the priority projects that focuses on critical battery materials under the EU Critical Raw Materials Act.
In an interview on Tuesday, geologist Ignatius Kamwanje said the development will boost investor confidence on the mining project, adding that with global geopolitical dynamics, western countries are shifting to Africa in terms of supply of raw materials from critical minerals such as rare earths.
