While focused on advancing its Lushoto bauxite project in Tanzania, ASX-listed Lindian Resources has expanded its East African project portfolio having progressed with its acquisition of up to a 75% interest in a major rare earths project in Malawi.
A consent order between the Malawi Ministry of Natural Resources and Environmental Affairs and Michael Saner has been signed for the Kangankunde rare earths project in Malawi – reportedly one of the largest rare earths projects outside of China.
The acquisition was announced in August, the seller – Rift Valley Resources.
This will not be the first mining company looking to develop a rare earths project in the country. Mkango Resources’ Songwe Hill project is also in the streams of development.
The Kangankunde project is located in southern Malawi 100 km north of Blantyre and 25 km from the Nacala rail corridor. The carbonatite mineralisation was first discovered in 1907 however the importance of rare Earth mineralisation within the deposit was not noted until the early 1950s.
The project has had several phases of exploration with the most comprehensive geological and process test work completed between 1987 and 1990 by the French geoscience organisation Bureau de Récherches Géologiques et Minières (BRGM).
Lindian’s proposed work programme
With the consent order now obtained, Lindian will move quickly to:
- verify and update all previous reports and studies on the project which included pre-feasibility economics; and
- conduct initial on-site sampling and mapping to assist in confirming previously reported grades.
After the initial stage 1 acquisition has been finalised with the issuing of a new EPL over the project, Lindian will conduct further drilling to provide confirmation of grade as well as confirm and / or raise Resource confidence from previously reported categories.
Lindian has an existing technical team established in neighbouring Tanzania and is well placed to conduct and complete all due diligence activities.
Conditions precedent to Stage 1 acquisition
With the consent order now being granted, Lindian will proceed to finalise its due diligence on the proposed acquisition and then convene a meeting to seek the necessary shareholder approvals.
Lindian chairman Asimwe Kabunga comments:
“The settlement between the Malawi Ministry of Natural Resources and Environmental Affairs and Mr Saner effectively ends 15 years of litigation in respect of this project and allows for Lindian to finalise its due diligence.”
“The global rare earths market is expected to surpass US$20 billion by 2041, driven in part by surging demand for electric and hybrid vehicles.
“The Kangankunde rare earths project has all the hallmarks of a top tier global rare earths project underpinned by its size and scale. As a result, Lindian has every opportunity to become a major player in the global rare earths market through the successful development of Kangankunde.
Additional project highlights
- The Kangankunde deposit is a large rare earth carbonatite system that rises up to 200 m above the surrounding plane over an area of 1.4 km by 1.7 km.
- The Kangankunde deposit also has extremely low thorium and uranium levels for a rare earths deposit.
- Project economics have not been independently updated since 2011. Since then, key rare earths Neodymium and Praseodymium have become increasingly valuable given their strategic use in permanent magnets for electric vehicles.
- The consent order settles all matters between the parties and, more importantly, provides for the issuing of a new EPL (25 km²) over all the ground that comprises the Kangankunde rare earths project. The EPL will be in accordance with current Malawi regulations and be for an initial period of 3 years and shall be renewable twice for periods of 2 years each.
- The consent order also provides for the Malawi Ministry of Natural Resources and Environmental Affairs to support the conversion of the EPL into a Mining Licence (in accordance with the application of all valid regulations) as well as assistance with any financing parties introduced to develop the project.