Name of the Project
Kangankunde rare earths project.

Location
About 90 km north of Blantyre and 13 km south of Balaka, in Malawi.

Project Owner/s
Australia-based Lindian Resources.

Project Description
A feasibility study on the Stage 1 development of the project has confirmed a technically low-risk and economically robust project, with maiden ore reserves of 23.7-million tonnes at 2.9% total rare-earth oxides (TREOs) supporting a Stage 1 life-of-mine of 45 years. 

Stage 1 envisages average production of about 15 300 t/y of premium concentrate with 55% TREO grade, with low levels of radionuclides (thorium and uranium) and limited acid-consuming minerals. 

The premium concentrate will contain an estimated 8 400 t/y of rare-earth oxide (REO) and about 1 640 t/y of neodymium/ 
praseodymium. 

The unique mineralogy of the Kangankunde’s ore makes it amenable to relatively high levels of REO recovery, mainly through a physical process of gravity and magnetic separation. 

As a result, the project’s flowsheet only arequires a small flotation circuit at the back end of the plant to reduce impurities such as sulphides.

The very strong economics of Stage 1 and the large resource endowment of the project, together with robust market demand forecasts, provide confidence for a potential Stage 2 expansion to significantly increase yearly production. 

Lindian intends to formally start a Stage 2 expansion study in 2024.

Potential Job Creation
As at April 2025, more than 70% of site-based roles were filled by local workers, with training and skills development programmes under way to expand the workforce and support regional economic development. Lindian is also working with local communities to create long-term opportunities through employment and procurement.

Net Present Value/Internal Rate of Return
Stage 1 has an after-tax net present value, at a (real) 8% discount rate, of $555-million and an internal rate of return of 80%, with a payback of 1.5 years.

Capital Expenditure
Preproduction capital is estimated at $40-million, which includes 12.5% contingency, making it one of the lowest capital cost rare earths projects under development.

Planned Start/End Date
The development schedule is aiming to achieve funding confirmation in the third quarter of 2024, the start of site construction in the fourth quarter of 2024 and commissioning of the processing plant in the fourth quarter of 2025.

Latest Developments
Australian resources company Iluka Resources has entered into a binding loan term sheet and a full-form offtake agreement with Lindian Resources for the long-term supply of rare-earth concentrate from the project.

Under the terms of the agreement, Lindian will supply Iluka with 6 000 t/y of rare-earth concentrate for about 15 years, totalling about 90 000 t.

This material will be complementary feedstock for Iluka’s Eneabba rare earths refinery, in Australia, and will represent about 10% of Eneabba’s capacity.

In a media release, Iluka says Eneabba will be Australia’s first fully integrated rare earths refinery and will produce separated light and heavy rare-earth oxides.

The refinery, under construction and scheduled for commissioning in 2027, is being built through a strategic partnership between Iluka and the Australian government.

To support Lindian’s development of Kangankunde, Iluka has entered into a $20-million loan facility agreement with a five-year term at an interest rate of secured overnight financing rate plus 11% a year, with interest capitalised for two years during construction.

The loan will be made available subject to Iluka completing due diligence, Kangankunde being fully funded and after other construction funding has been spent.

Lindian is continuing the evaluation of its Phase 2 expansion study to achieve a substantial increase in production beyond the 15 300 t/y of concentrate targeted in Phase 1. The expansion will involve a right of first refusal (ROFR) mechanism for Iluka to provide project funding and procure additional offtake volumes.

If Iluka provides an offer for debt funding for at least 50% of the Phase 2 expansion costs, Iluka’s ROFR over 80% applies up to a maximum of 25 000 dry metric tonnes a year of additional concentrate for 15 years, providing a strong foundation for growth as part of the strategic partnership.

Key Contracts, Suppliers and Consultants
None stated.

Contact Details for Project Information
Lindian Resources, tel +61 8 6557 8838 or email info@lindianresources.com.au.