Development of Lindian Resources’ flagship Kangankunde rare earths project in Malawi is picking up pace, with early site works progressing ahead of schedule and a range of funding proposals now under review.

The ASX-listed company said on Wednesday it had received a nonbinding term sheet from Ecobank Malawi for a proposed $30-million senior secured term loan facility with a five-year tenor and an 18-month grace period. Ecobank intends to act as the mandated lead arranger and lender for the facility.

This proposal adds to several financing options under consideration, including a senior secured bond offer from a European investment bank targeting a 60:40 debt-to-equity ratio, and offtake prepayment proposals from commodity traders and downstream users.

These would be assessed alongside an existing $50-million non-binding funding arrangement with Gerald Group, signed in December last year.

“The continued interest from commercial banks, investment groups and offtake partners is a strong vote of confidence in the Kangankunde project and in Malawi’s emergence as a critical minerals jurisdiction,” said Lindian.

The company’s funding strategy involves raising a limited-recourse project finance package to cover capital expenditure, ramp-up operating costs, working capital and interest during construction.

Kangankunde boasts a 45-year life-of-mine, with an average total rare earths oxide (TREO) grade of 2.9%, rising to 3.1% in the first five years. It will produce a 55% TREO monazite concentrate with minimal deleterious elements and low radionuclide content. The project’s operating cost of $2.92/kg REO places it in the lowest global cost quartile.

Rare earth elements neodymium and praseodymium, essential in permanent magnets for electric vehicles and wind turbines, are the primary products, positioning Kangankunde as a key contributor to global supply chain resilience amid geopolitical tensions.

Project execution milestones are also advancing. Early road and site works are ahead of schedule and under budget, with a $1.3-million contract awarded to Mota Engil for the construction of a 5-km access road and associated civil works. This will facilitate the transport of materials for plant construction.

The design-and-construct contractor for the processing plant is expected to be appointed in the coming weeks, with the board currently conducting inspections and question-and-answer sessions with shortlisted parties.

Meanwhile, Lindian is finalising a power supply agreement, progressing a dry tailings optimisation study and wrapping up a logistics trade-off study. An optimised feasibility study is nearing completion and shows improved project metrics.

The company is also in discussions with downstream partners in the US, Asia and CIS regions, with 40% of Stage 1 production already under contract.

Lindian said its board and senior management had recently been in Malawi to finalise the mining development agreement with government authorities.

Looking ahead, the company’s next steps include concluding the financing package, awarding major contracts, ordering long-lead items, and initiating full-scale construction.