Developer of Kasiya Rutile Mine in Lilongwe, Soverign Metals, has projected the mine to generate a whopping $16 billion (about K18 trillion) revenue for an initial life of mine (LOM) of 25 years.

Pre-Feasibility Results (PFS) released on September 28 show that the mine is positioned to become the world’s largest rutile producer at 222 kilotonne per annum (kt/a) for an initial 25 years, but also potentially one of the world’s largest natural graphite producers outside of China at 244kt/a.

Rutile average price is projected at $1 484 per tonne while graphite average basket price is projected at $1 290 per tonne, with a cash operating cost of $404/t of product.

The statement said the results demonstrate that Kasiya is a globally significant project with potential to deliver a valuable long-term source of low-carbon dioxide products and generate substantial economic returns with a forecast average of $415 million (about K467.2 billion) per annum for the initial 25 years.

Reads the findings: “A detailed financial model and discounted cash flow [DCF] analysis has been prepared by the company in order to demonstrate the economic viability of the project.

Earlier applauded the company:
Mkandawire

“The DCF analysis demonstrated compelling economics of the prospective project, with an NPV [ungeared, after-tax, at an eight percent discount rate] of $1 605 million and an IRR [Internal Rate of Return] of 28 percent.”

Sovereign Metals managing director Dr Julian Stephens has said the PFS marks an important step towards unlocking a major source of two critical minerals required to decarbonise global supply chains and to achieve net-zero. 

“Kasiya’s compelling economics demonstrate the potential for industry-leading returns, even against the backdrop of global cost inflation. The company is looking forward to conducting an optimisation review in collaboration with new strategic investor, Rio Tinto and progressing to the Definitive Feasibility Study,” he said.

Sovereign Metals said Malawi Government has constituted an Inter-ministerial Project Development Committee to work alongside the company to assist in the permitting processes, but officials from the Ministry of Mining did not respond to our calls yesterday on the matter.

In July, Ministry of Mining Principal Secretary Joseph Mkandawire applauded the company for an investment by Rio Tinto, an Anglo-Australian company, which is injecting $40.4 million Australian dollar (about K29 billion) in the project, resulting in an initial 15 percent shareholding.

Meanwhile, geologist Grain Malunga has said government needs to create a conducive environment for the sector, as investment is intensive.

He said: “There is an ernomous potential which the sector can provide, in terms of revenue generation and infrastructure development. All this depends on how government and citizens motivate investors to invest in these ventures.

“Investment incentives are necessary because mining is highly capital intensive and money is borrowed on the open capital market and stock exchanges. These people who put in money in such businesses expect high returns on their investments. So, government should not be too greedy.”

Kasiya in Lilongwe is touted to have the largest rutile deposit in the world with 1.8 billion tonnes of indicated and inferred resource at 1.01 percent.

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