Lindian Resources terminates Kangankunde’s offtake deal

Mining firm Lindian Resources Limited has terminated an off-take agreement with Gerald Metals for monazite concentrate for its Kangankunde Rare Earths Project in Balaka District, months before the October commissioning of the mine.

In an update, the Australian Securities Exchange-listed miner said both sides mutually agreed to terminate their 2023 off-take deal, which was for the sale and purchase of 45 000 metric tonnes of monazite concentrate over a 60-month period.

Kangankunde Rare Earth Project in Balaka District. | Nation

Reads part of the update: “The mutual agreement to terminate the agreement will now allow Lindian to be in full control of its sales pipelines, pricing, profitability, strategic jurisdictional strategies and sale quality.”

Geneva-based Gerald Metals, operating as part of the broader Gerald Group, is the world’s largest independent, employee-owned metals trading house, which focuses on the physical merchanting, logistics and financing of non-ferrous, ferrous, and precious metals.

Commenting on the development in an interview yesterday, geoscience expert Ignatius Kamwanje said the move is strategic for the miner as it will enable flexibility to sell to whoever they choose and at prices they negotiate.

He said: “Strategically, Lindian Resources wants to supply the product direct and they don’t want an intermediary.

“The other thing could be that financiers or investors may have projected a risk due to current trends, raising fears of some changes that may affect their agreements.”

Lindian Resources Limited executive director Zac Komur is quoted in the update as having said the project remains on schedule for first production in fourth quarter of this year, with commissioning targeted for October and November.

“We are now moving rapidly towards mining operations. Access to the top of Kangankunde for the stage one pit is established, the haul road is complete, approximately 27 000 metric tonnes of ore is on the run-of-mine pad, explosives are onsite and the production drill rig is drilling the first blast pattern,” he said.

Chamber of Mines and Energy national coordinator Grain Malunga said in an interview yesterday that the project’s success reflects a decade of development.

“It is pleasing that they will soon start generating foreign exchange for the country,” he said.

Earlier this year, Lindian Resources Limited secured $100 million (about K180 billion) to fund Kangankunde development, strengthening Malawi’s position as an emerging player in the global rare earths market.

The financing plan, through the sale of 133.33 million shares to Australian and offshore investors at $0.75 (K1 350) per share, allows for debt-free development, with stage one costs covered and future expansion to be funded from cash flows.

Malawi’s entry into rare earth production is expected to diversify the global supply chain, reducing dependence on China and strengthening Africa’s mineral sector as the United States and Europe seek alternative sources.

When operational, the Kangankunde Mine is projected to generate $114 million (about K205.2 billion) per year over 40 years, according to a feasibility study report released by the company this year.

Kangankunde hosts a 261 million tonne resource grading 2.19 percent total rare earth oxides, including a high-grade starter zone of 26 million tonnes earmarked for early production.

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