Mkango Resources Limited-owned Songwe Hill Rare Earth Project is on the verge of securing $100 million (about K175 billion) direct loan for mine development from the US Government-owned International Development Finance Corporation (DFC). The firm said this in its third quarter report, highlighting its key activities between July and September and some of its short to medium-term plans. Among others, the Toronto Securities Exchange-listed miner, which had earlier secured the DFC’s $4.6 million (about K8 billion) reimbursable funding for the project, said such engagement with a reputable institution further validates its strategic importance to global rare earth supply chains.
Reads part of the report: “The DFC’s engagement further validates Songwe Hill’s strategic importance to global rare earth supply chains and is expected to complement Mkango’s broader financing strategy.” During the quarter, the company also signed a business combination agreement with Cayman Island firm to form a global “vertically integrated rare earth company” to focus on supplying mined, refined and separated rare earth oxides to markets across North America, Europe and Asia. Mkango Resources Limited chief executive officer William Dawes is quoted as having said they are delighted by the continued support and confidence from their existing shareholders and partners. “This funding will enable Mkango Resources Limited to maintain momentum on achieving commercial production in the UK and the development of the Germany operation,” he said.
Earlier this year, the European Union (EU) identified Songwe Hill Rare Earth Project alongside 13 other projects globally as priority projects that focus on critical battery materials under the EU Critical Raw Materials Act. In a statement, the EU Commission said: “Combined with the three strategic projects in the EU that cover the processing of rare earths, these additional strategic projects will be able to increase the EU’s security of supply of rare earths.” In an interview on Wednesday, geologist Ignatius Kamwanje said the development will boost investor confidence on the mining project, which already signed a mining development agreement with the Malawi Government in July last year. “With global geopolitical dynamics, western countries are shifting to Africa in terms of supply of raw materials from critical minerals such as rare earth and niobium, whose supply were initially dominated by China and Russia,” he said.
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Kamwanje said the EU provides a stable and strong market for Malawi’s rare earth projects. Songwe Hill is one of the few rare earths projects to have progressed to the definitive feasibility stage, with an expected mine life of 18 years, producing a 55 percent mixed rare earth carbonate, yielding 1 953 metric tonnes per annum. In the mining development agreement that Mkango subsidiary signed, the Malawi Government owns 10 percent shareholding in the firm.
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