Lindian Resources Limited, an Australian Securities Exchange-listed bauxite explorer, is set to invest $30 million (about K31.8 billion) in the exploration of rare earth elements at Kangankude in Balaka.
The deal, which is subject to shareholders’ approval, will see the firm taking full control of Kangankunde Mine in Balaka through a 100 percent share acquisition from Rift Valley Resource Developments who are the project owners, the firm said in a statement.
Lindian Resources Limited chairperson Asimwe Kabunga is quoted in a statement as having described the development as outstanding for the firm, which will deliver a huge value for shareholders.
Some of the rare earths that could be found at Kangankunde Mine in Balaka
Reads the statement in part: “The potential of the Kangankunde Rare Earths Project is indeed significant and it has been highly sought after by many parties over a number of decades.
“This binding transaction gives Lindian control of one of the world’s premier undeveloped rare earths deposits at a time when global demand is universally forecast to accelerate materially in the years ahead.”
According to www.businessnews.com, the $30 million price tag is payable in four tranches, comprising a non-refundable deposit of $2.5 million (about K2.5 billion) followed by a further $27.5 million (about K28 billion) payable in three parcels within 48 months from the signing date of the agreement.
The miner intends to fund the payments with its existing cash reserves of almost $2.2 million (about K2.2 billion) and from third parties that have already expressed considerable interest in gaining exposure to the project.
Speaking in an interview yesterday, Malawi Chamber of Mines and Energy national coordinator Grain Malunga described the development as positive for the mining industry.
He, however, cautioned the country to be vigilant on deals of such nature to ensure they benefit the country.
Said Malunga, a geologist, who also served as Minister of Energy: “This is some news for joy for the country coming at a time the economy is in dire need of diversifying. Mining is the sure way out of our misery.
“We need to collaborate with the company and deploy our experts to be part of the process at every stage to ensure smooth working relations and mutual benefit.”
Meanwhile, the Kangankunde deposit has an outdated resource of 2.53 million tonnes, grading 4.24 percent rare earths oxide (REO) and containing 107 000 tonnes of REO when using a cut-off grade of 3.5 percent.
Back in 2007 when the project was in the hands of Australian Securities Exchange-listed Lynas Resources, the firm justified the relatively low cut-off grade based on metallurgical test work supporting the deposit’s amenability to a low-cost gravity separation method resulting in a 60 percent REO concentrate.
Lindian Resources Limited intends to review the previous results using new technology to identify methods for recovery improvement.
Growth in the mining sector has lately been on the decline, falling from 7.4 percent in 2019 to 3.1 percent in 2020, according to the 2022 Malawi Government Annual Economic Report.
This year, growth for the sector is projected to reach 4.6 percent with the expectation that demand for quarry aggregate will increase.