Sovereign Metals Limited, proprietors of Kasiya Rutile and Graphite Project in Lilongwe, has partnered the International Finance Corporation (IFC) in a deal that gives the World Bank Group’s private sector financing arm rights on the project. This comes few years after a leading American miner Rio Tinto bought shares in Sovereign Metals whose project boasts to have the world’s largest rutile deposits and its definitive feasibility study (DFS) is expected to be completed in 2026 first quarter. The deal, according to an update from the company, will enable IFC to provide technical support during the DFS, Environmental Social Impact Assessment (Esia) study and financing during mine development.
Reads the agreement in part: “IFC will act as lender and/or mandated co-lead arranger in relation to all or a part of any financing of the project by means of senior, subordinate, mezzanine or any other type of loans and/or the mobilisation from or syndication to third-party lenders of loans to finance the project. If, during the 36 months term of the agreement, Sovereign Metals receives an offer from a third party to fund the construction of Kasiya, IFC has the right to match those terms according to the agreement. Sovereign Metals chief executive officer Frank Eagar said IFC brings unmatched advantages to Kasiya’s development as its involvement at this stage will support the DFS and Esia efforts to be aligned with IFC’s Environmental and Social Performance Standards.
Said Eagar: “This collaboration provides Sovereign with a clear pathway to financing while supporting Kasiya to meet the global standards that institutional investors require.” “Having IFC’s support validates Kasiya’s exceptional quality and strategic importance and takes us one step closer to project execution. The World Bank Group’s support for key enabling infrastructure, including the Nacala transport corridor and the Mpatamanga Hydropower Project, are expected to benefit the Kasiya project.” Meanwhile, analysts have described the collaboration with IFC as a sign that the Kasiya Rutile deposits are attractive to global financiers who are convinced of its potential because of confidence that Rio Tinto had exhibited on the project. Geologist Ignatius Kamwanje said the coming of the IFC could fast track the processes during DFS and Esia due to its technical expertise.
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He said: “As you might be aware, IFC is affiliated to more multilateral financiers mainly from the West so with the critical minerals growing demand, and with Rio Tinto’s reputation, they are willing to collaborate. “The most important element for the project is that with the IFC’s team of experts, it could be easy for the DFS, Esia as well as financing needs to be accomplished earlier and ensure the mine development progress within schedule.” Geologist and former minister of Energy Grain Malunga has since reiterated the need for the country to make serious investments in the extractive industry, calling for development of laboratories as the sector booms. In July 2024, Ministry of Natural Resources, Energy and Mining signed two mining development agreements with Lotus Resources Limited, owners of Kayelekera Uranium Mine in Karonga and Lancaster Exploration Limited for the Songwe Hill Rare Earth Project in Phalombe District.
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