Mining firm Lindian Resources Limited has secured an off-taking contract with a United States-based company for its Kangankunde Rare Earth Project in Balaka District.
Geological experts have since said the development could enable the commencement of mining activities within nine months.
In its 2024 annual report, which covered the first half of 2024, the Australian Stock Exchange-listed Lindian Resources Limited said this agreement follows impressive findings of stage one Kangankunde development feasibility study.
Reads the report in part: “Lindian signed a sale and purchase contract with USA-based global metals trading company Gerald Metals Sari.
“The contract provides for the supply and sale of 45 000 metric tonnes of monazite concentrate from the stage one development of Kangankunde while retaining the right for Lindian to enter into additional sales contracts with other counterparties.”
The report indicates that the feasibility study for the said stage confirmed strong project economics highlighted by a pre-tax net present value of $794 million (about K1.4 trillion) and an average annual earnings before interest tax, depreciation and amortisation (Ebitda) of $83 million (about K145 billion).
The report further said with a pre-production capital cost of $40 million (about K70 billion), which includes 12.5 percent contingency, the numbers confirmed in the feasibility study, make Kangankunde one of the lowest capital cost rare earths projects under development.
“The outstanding results also mean that the stage one project will be one of the few global rare earths projects, which can deliver a positive annual Ebitda, even if rare earths prices are subdued at the lower end of their long-term trading range near $50 per kilogramme,” reads the report.
In a statement, Lindian Resources Limited executive chairperson Asimwe Kabunga said that after completing payment of a strategic $35 million (about K61 billion) placement to Rift Valley Resources, which resulted in its current majority 67 percent stake in Kangankunde, the firm is well-funded as it works to secure the development financing required to start construction and operations.
In an interview on Tuesday, geologist Grain Malunga, said having signed the off-taking agreement, Lindian Resources, which did not require Mining Development Agreement because it registered as a medium-scale miner, means it could start its mining activities in nine months.
“Considering how slow mining projects move to reach actual extraction, Lindian is the fastest project Malawi has experienced because it did not face serious obstacles during all stages such as licensing, exploration and feasibility, probably because it inherited the project from another company,” he said.
Malunga, who is former minister of Mining, said at this stage, a medium-scale mining project such as Kangankunde would take a minimum of nine months to start mining activities, but for large scale projects, it could take 18 months or more.
In a separate interview, former Ministry of Mining geologist Ignatius Kamwanje said the coming of off-takers means global rare earth players are valuing the uniqueness of the deposits found on Kangankunde, which is likely to attract project financiers.
He said: “It is believed that the rare earths found at Kangangunde in Balaka are unique with special value and demand globally; hence, it was not difficult to attract potential buyers.”
The results of phase three drilling programme under exploration showed that Kangankunde has one of the world’s best rare earths deposits with excellent grade, non-radioactive material, a high neodymium/praseodymium ratio and enormous scale.
