Study puts Mkango’s rare earth project profitability at K593bn

Mining firm Mkango Resources Limited definitive feasibility study (DFS) for its Songwe Hill Rare Earth Project in Phalombe District has shown attractive results, with the mine’s profitability projected at $339 million (about K593 billion). The DFS also known as bankable feasibility study, is key as it enables financiers to make investment decision. The findings show that the project’s initial capital expenditure is approximately $297.8 million (about K521 billion) excluding a $27.8 million (about K48.6 billion) contingency for development of mine, mill, flotation and hydrometallurgy plants, tailings storage facility and related project infrastructure.

Reads the report in part: “Songwe post-tax net present value is approximately $339 million, using a 10 percent nominal discount rate with an internal rate of return of 24 percent, payback period of 3.4 years from start of full production and post-tax life-of-operations nominal cash flow of $1.55 billion (K2.7 trillion).” The study said the mine will have a lifespan of 18 years life span with production averaging 5 954 metric tonnes (MT) per year total rare earth oxides for the first full five years of production, including 1 953MT per year of neodymium and praseodymium oxides and 56MT per year of dysprosium and terbium oxides. Mkango Resources Limited president Alexander Lemon said the study is critical to investors as it highlights assumptions regarding rare earth pricing, production volumes, recoveries, capital and operating costs, discount rates, tax regimes, project schedules, and market demand forecasts. He said: “Incorporating revised rare earth pricing, capital and operating cost assumptions, these studies reflect our commitment to moving these high-quality projects forward.

“As one of the few companies in the sector to update feasibility studies with current market pricing, Mkango is uniquely positioned as a future supplier of both mined and recycled rare earths , a critical differentiator as global demand for green transition materials accelerates.” In an interview yesterday, geoscience expert in minerals, mining and metals Ignatius Kamwanje said the study has added value on the company’s resources. “The study means the company had to revise its rare earth pricing, capital and operating cost assumptions. As such it positions the project as attractive to investors,” he said.

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Parliamentary Committee on Natural Resources, Energy and Climate Change chairperson Tiaone Hendry urged Mkango Resources Limited to accelerate the development of the project, warning that any delays could slow efforts to harness the economic potential of rare earth minerals. “Commencement of production is paramount,” she said, noting that the project could generate employment, foreign exchange earnings, royalties and tax revenues while also supporting community development. The company is currently undertaking front-end engineering and design, a detailed engineering stage designed to reduce construction risks before full-scale development begins. Mining contributes one percent to the country’s gross domestic product, according to the 2026 Malawi Government Annual Economic Report.

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