London-listed magnet metal supply chain developer Pensana has received approvals for the full financing of about $268-million for the development of its Longonjo rare earth project, in Angola.

The board of the Africa Finance Corporation (AFC) has approved its $81.2-million participation in a $160-million syndicated loan facility alongside South African financial services provider Absa Bank, subject to the conclusion of definitive loan documentation and the fulfilment of conditions precedent contained therein.

The facility will provide about 60% of the Longonjo Phase 1 funding.

The balance of Phase 1 funding will be provided through equity, with the Angolan Sovereign Wealth Fund (FSDEA) having approved investment of $38-million in the form of equity and a convertible loan and AFC having approved investment of $54.9-million in the form of a convertible loan. 

The equity investments will be at subsidiary level and are also subject to the conclusion of definitive documentation and the fulfilment of conditions precedent contained therein.

The FSDEA's investment is in addition to a $15-million bridging loan previously provided to Pensana.

"We are extremely grateful for the work undertaken by the AFC and FSDEA teams in providing the funding requirements for the Longonjo project.

"The Longonjo project will produce an average of around 20 000 t/y of clean high-value mixed rare earth carbonate (MREC) and will have a major positive impact on the community, creating over 430 high-value processing jobs. Over 50% of the jobs created are expected to be allocated to young people as well as supporting local businesses, service providers and farmers," Pensana chairperson Paul Atherley says

"At AFC, we recognise the immense strategic value of Africa's resources – not just for our economic transformation but for securing diversified, sustainable supply chains for the future. Our partnership with Pensana and FSDEA on the Longonjo project reflects our unwavering commitment to unlocking Africa's mineral potential through local value addition, industrial growth and responsible mining. 

"By investing in Africa's rare earth sector, we are not only accelerating regional development but also strengthening global energy security in line with the aspirations of the Mineral Security Partnership," AFC president and CEO Samaila Zubairu comments.

FSDEA chairperson Armando Manuel adds that the Longonjo project holds strategic significance for the FSDEA as part of its commitment to advancing the national mining sector. 

"Beyond its substantial economic impact, such as job creation and tax revenues, the project plays a crucial role in establishing in Angola a key segment of the value chain for an industry essential to the global energy transition.

"As a key investor, FSDEA has been instrumental in demonstrating the untapped potential of Angola's mining sector, which remains a critical driver of economic diversification. With the support of Absa and AFC, this initiative represents a concerted effort to foster sustainable growth, enhance local capabilities and reinforce Angola's position in the international mining landscape."

The Longonjo project comprises and openpit mine, concentrator and recovery plants, which will produce MREC for export through the Lobito port. The project is adjacent to the Lobito rail corridor.

The company's share price on the LSE surged to 40.9p apiece on the news, compared with the March 17 closing price of 27.9p apiece.