Mining & Trade News

By Marcel Chimwala

ASX-listed Lindian Resources has released exciting feasibility study results for Stage 1 of the Kangankunde Rare Earth Mining Project in Balaka.

The Feasibility Study examines Stage 1 of the Kangankunde Project's development, which includes mining operations, a mineral processing plant, and necessary support infrastructure.

Lindian CEO Alywn Vorster says in a statement that the results of the Study support a technically robust Stage 1 project with highly attractive economics and provides confidence that a significantly larger expansion project in the future should be considered.

The results indicate that Kangankunde Stage 1 has a post-tax Net Present Value (NPV8 real) of US$555M (A$831M), an internal rate of return (IRR) of 80% and average annual earnings before taxes, depreciation and amortization (EBITDA) of US$84M1 (A$124.5M) 1 .

Vorster explains that the study shows that Stage 1 of the mining project has pre-production capital cost of US$40M (A$60M2) which includes 12.5% contingency, making it one of the lowest capital cost rare earths projects under development.

He says an average annual FOB (Free On Board) operating cost of US$2.92/kg total rare earth ore (TREO) positions Kangankunde in the lowest cost quartile of the global rare earths industry while a payback period of less than 2-years, and post-tax net present value (NPV) to Capex ratio of more than 10:1 are outstanding characteristics across the total mining industry.

“The low-cost structure means that the Stage 1 Project will be one of very few global rare earths projects which can deliver a positive annual EBITDA at current low rare earths prices,” says Vorster.

The Stage 1 project targets Maiden Ore Reserves of 23.7 million tonnes at 2.9% TREO supporting a life-of-mine of 45 years.

The plan is to produce an average annual ~15,300 tonnes per annum (tpa) premium concentrate with 55% TREO grade, with low levels of radionuclides (thorium and uranium) and limited acid consuming minerals. The premium concentrate will contain ~8,400 tpa of REO and ~1,640 tpa of NdPr.

There will be no pre-stripping, and the work will produce very low waste to ore ratio of less than 0.21. using a simple flowsheet based on gravity and magnetic separation requiring limited reagents, and availability of low-cost grid power.

Vorster says: “The Feasibility Study results reaffirm the world-class status of the Kangankunde Project and its competitive positioning to meet a rising demand for rare earths. It is distinguished by its high grade, low levels of impurities and attractive cost structure that positions the Project in the lowest cost quartile of rare earths projects globally.”

“The Stage 1 development will require low upfront capital cost, presents low commissioning risk, and generates strong financial returns. Importantly, Stage 1 could serve as logical springboard for future expansion options. Kangankunde is fully permitted to commence construction and operations once financing is confirmed.”

“The Feasibility Study has been prepared over 10 months by a team of experienced contractors, consulting firms and Lindian team members. The quality of the study is first class, and everyone is to be congratulated on their efforts.”

Executive Chairman Asimwe Kabunga comments: “We are extremely proud of the excellent Feasibility Study results. We have been discussing funding options for Stage 1 with several parties over a number of months, and the Feasibility Study is the key catalyst to progress these negotiations, as well as attract new funding interest. We are confident of securing a superior funding solution that minimises dilution for shareholders. The fully permitted Kangankunde Project is strongly supported by the Malawian Government and the local communities. It will create hundreds of jobs, improved local infrastructure and become a major source of income for the Malawian economy.”

Meanwhile, Kangankunde is attracting significant offtake interest with its premium product specifications, with ~40% of annual production already contracted with USA commodity trading group, Gerald Metals.

Vorster reports that key development approvals are in place, meaning construction contract award to preferred tenderers can occur within a short timeframe, once funding has been secured.

He says: “Multiple funding discussions are gaining momentum with construction groups, trading companies and strategic investors. Lindian also currently maintains a healthy cash reserve.”

Lindian’s development schedule aims to achieve funding confirmation in the third quarter of 2024, commence site construction in the fourth quarter of the year and commission the processing plant in fourth quarter of 2025.

“The very strong economics of Stage 1 and the large resource endowment of the Kangankunde Project, plus robust market demand forecasts, provide confidence for a potential Stage 2 expansion to significantly increase annual production. Lindian intends to formally commence a Stage 2 expansion study in 2024,” he says.

Stakeholders acting in the extractives sector has tipped the Malawi Government through the Ministry of Mining on some of the incentives to reduce corrupt practices in the mineral sector.

Commenting during a panel discussion on Zodiak Television, Human Rights Advocate for Centre for Human Rights and Rehabilitation (CHRR), Loveness Thole said the government has all it is needed to fight corruption in the extractives sector and what is needed is the enforcement of the laws.

Thole said for the Government to ensure that corrupt practices within the sector has been reduced, they require to enforce containments of the new Mines and Minerals Act of 2023.

“Government should just enforce what is in the laws. Our laws contain almost everything including manning any corrupt practices.”

“What was lacking in the old act was enforcement and I believe if the ministry can enforce what is the new law, no any corruption can happen within the sector,” said Thole.

In his remarks, Consulting Geoscientist, Igneous Kamwanje urged for unity within the sector in order to put to an end corruption in the sector.

Kamwanje further appealed to Malawi Extractives Industry Transparency Initiative (MWEITI) to perform its duties including implementing some of the recommendations written in annual reports.

“We need to have unity of direction. Would love the MWEITI to be performing its duties. Almost every year they produce reports and what is written in their reports every year it does not work on the ground.”

“The non-state actors like them, they bring in checks and balances in terms normalization and bringing in standards in enforcement of the laws. For the corruption to end the people needs to be united and there is a need for disclosure of information.”

“Because when the information is disclosed to the public we both move in one direction and everyone know where we are going.”

“Despite that mining is at infant stage but there is a lot that is going on in terms of institutions which is overlaps in some of its mandates creating a room for corruption,” said Kamwanje.

The panel discussion was organized in line with Empowering Stakeholders Driving Just Resources Governance through open Contracting and Licensing Project being championed by Perekezi Consultancy under empowering Just Energy Transition (JET) minerals challenge with funding from USAID.

In a separate interview, Representative for Perekezi Consultancy Chikomeni Manda advised the government to be transparent in some of the processes conducted within the sector to ensure no deal is suspicious to the general public.

Manda also tipped the ministry to ensure speed process of contracts and licenses saying delays for finalize the documents influences the investors to indulge in corruption to meet the deadline.

He said: “The government should ensure transparency in how they handle licensing issues to build public trust and confidence.

“It is also very important to reduce the long waiting time for licenses as the more it delays, the investor resort to corrupt practices with the aim of speeding the process,” he said.

Meanwhile, a number of Mining Development Agreements (MDAs) are still in pipeline awaiting final approval by the ministry of mining.

By Modester Mwalija         

ASX- listed Sovereign Metals, which is prospecting for rutile and graphite in Kasiya area in Lilongwe, says results of graphite test work conducted across multiple independent laboratories in Australia, Canada and South Africa have delivered superior quality, low impurity graphite for battery anodes.

Sovereign Metals MD Frank Eagar says in a statement that the graphite circuit feed prepared at Sovereign’s existing Lilongwe laboratory facility has produced high quality concentrates in benchtop and pilot-scale flotation and cleaning.

Four independent laboratories all successfully produced high-grade graphite concentrate averaging over 97% Total Graphite Content (TGC) with flotation recoveries exceeding 90%.

Eager explains that the graphite concentrates indicate exceptionally low levels of sulphur compared to typical hard-rock graphite peers – a key metric to qualify as active anode material for lithium-ion batteries.

He says the test-work demonstrated excellent results using a conventional flowsheet that was consistent across all laboratories, thus confirming Sovereign’s ability to produce a high-quality graphite concentrate.

Eagar says: “Our ability to upgrade Kasiya ore at 1.4% graphite to a 55% rougher concentrate without any crushing or milling, highlights more of the unique qualities of Kasiya. There are very limited other graphite projects with these characteristics.”

“The pilot-scale results also confirm that Kasiya produces high-grade concentrates with very low sulphur levels at high recoveries. Simply put, Kasiya will be a stand out producer of high-quality graphite concentrate at industry low operating costs.”

The tests successfully generated high-grade graphite concentrate of 94.9% to 97.8% Total Graphite Content (TGC) while achieving high flotation recoveries of 91.2% to 97.2%.

He says the graphite feed grades of 3.5%-4.0% TGC to the graphite circuit are significantly higher than the Mineral Resource Grade of 1.44%, highlighting the ~2.4 to 2.8 fold upgrading of graphite grades when Run of Mine (ROM) ore passes through the front-end rutile gravity separation circuit.

“This percentages demonstrates the ease of separating the rutile heavy mineral and graphite streams from the front end of the Kasiya Pre-feasibility Study process flow sheet and highlights the commercial benefits of having both rutile and graphite mineralisation co-existent in the same soft saprolite-hosted orebody,” says Eager.

He explains that the Kasiya material has exceptionally low levels of all of impurities iron, sulphur, silicon and aluminium compared to the Chinese Standard, which will potentially lead to significant commercial advantages during purification boosting Kasiya’s potential as a long term secure source of graphite.

Meanwhile, Kasiya concentrate has been sent for downstream test work at a globally respected graphite consultancy ProGraphite to produce and characterise Coated Spherical Purified Graphite (CSPG) active anode material for lithium-ion batteries.

Eagar says ProGraphite is conducting shaping, purification, and coating test work to produce CSPG and evaluate the electrochemical performance of Kasiya CSPG.

“This will provide baseline data for further optimisation and engagement with off-takers. Initial outcomes of this test work are expected to be released in the coming weeks,” says Eagar.

China dominates the supply of graphite for battery anodes.

Kasiya is the world’s largest rutile deposit and one of the largest graphite deposits.

By Modester Mwalija

ASX-listed Sovereign Metals says it has initiated a follow-up 400 metre spaced drill program at its tier one Kasiya Rutile-Graphite Project in Lilongwe.

Sovereign metals MD Frank Eagar says in a statement that the program will focus on determining the boundaries and extent of mineralisation north of the known Mineral Resource Estimate (MRE) area.

 “The 70+ hole hand-auger drill program has been designed to target areas where mineralisation was identified in earlier wide-spaced regional hand-auger drilling. The target area is up to 20km north of the current MRE boundary,” Eager states.

Eagar says that the drilling, currently underway, will be completed in the coming weeks and to ensure smooth operations, four hand-auger teams have been deployed under the supervision of Sovereign’s in-country technical team.

For sample analysis, Eagar states that samples will be initially processed in the Company’s Lilongwe laboratory facility and then shipped for final analysis at certified international laboratories.

“Results from the drill program are expected in the coming weeks,” he says.

Earlier this year, the Company released an announcement regarding the results of regional hand-auger drilling conducted south of the Kasiya MRE footprint. The results revealed significant strike extensions of approximately 8km across multiple parallel mineralised zones ranging from 400m to 2km in width.

Eager clarifies that all the newly defined mineralization in the south remains open at depth and represents the potential to expand the already significant high-grade Rutile and Graphite Mineral Resource Estimate (MRE) at Kasiya.

“All newly defined mineralisation in the south remains open at depth due to the limitations of the hand-auger drilling method but are expected to continue to the saprock boundary normally between 20 and 30 vertical metres from surface”, says Eager.

In September 2023, Sovereign released a Pre-Feasibility Study confirming that Kasiya has the potential to emerge as one of the world’s largest and lowest-cost producers of natural rutile and natural graphite, with a remarkably lower carbon footprint compared to current alternatives.

The findings of the Pre-feasibility study also confirmed Kasiya as a major critical minerals project, possessing a substantial low carbon footprint while delivering major volumes of natural rutile and graphite and generating significant economic returns.

The proposed large-scale operation in Kasiya aims to process soft, friable mineralisation mined from surface with its valuable location boasting excellent infrastructure, including bitumen roads, a high quality rail line connecting to the deep-water port of Nacala and access to hydro-sourced grid power.

Natural rutile is a genuinely scarce commodity, with no other known large rutile dominant deposits being discovered in over half a century. Kasiya is now shown to be the largest single rutile deposit in the world, with central Malawi now hosting the largest known rutile province in the world.

Rumphi based Mchenga Coal Mine (MCM) says it is working on increasing its production capacity from the current 1,200 metric tons per month to 4,500 metric tons.

Speaking in an interview on the sidelines of the Malawi Mining Investment Forum in Lilongwe, MCM Acting Mine Manager Assan Tembo said in order to meet the production target, the company plans to open new mining sites within the license areas which will be operating concurrently with the old mining sites.

Tembo said the company is also working on repairing machinery which stopped working resulting in low production.

 “Recently we were facing challenges due to very heavy rainfall which resulted in high water levels in the mines but we are now ready to resume production, and anytime soon maybe in the next two months our production will go up to 4500 per month after opening the new mines,” he said.

Tembo assured customers that Mchenga will continue providing coal of good quality despite increasing production.

 “If you remember, since we started mining, people have been saying Mchenga coal is of the best quality. It is the same coal we are mining. We promise to maintain the same quality of coal after opening the new mine. It is good quality coal, and industries like cement production, which needs quality coal, will like our coal,” said Tembo.  

Mchenga’s labour force currently comprises 285 employees, and they provide workers and their families amenities which include a clinic, a primary school, kindergarten, a subsidized shop, sporting facilities, electricity, a club with Digital Satellite Television, a maize mill and portable water.

The Company also provides industrial attachments to various students from technical colleges and universities in Malawi including interns from Malawi University of Science and Technology (MUST), Malawi University of Business and Applied Science (MUBAS) and University of Malawi – the Polytechnic.

Mchenga produces sub-bituminous coal of high calorific value of 5800-7400kcal/kg and low ash content of around 14-24% and its major customers include Limbe Leaf, Cement Products, Kanengo Tobacco Processors, CP Feeds Group, Castel Malawi, Alliance One, East Metals and Miscor.

The mine is located in Livingstonia Coalfield, which hosts a number of coal mines including Chombe, Jalawe and Kaziwiziwi.

A cross section of members of the Civil Society working in the extractive sector and the media now have the knowledge of how they can follow-up and help in curbing transnational corruption in green minerals thanks to the training workshop that was conducted by Perekezi ASM Consultants and Events in Lilongwe with funding from the United States Agency for International Development (USAID).

Perekezi organized the workshop in light of the increase in demand for the minerals which are important in the modern technological world.

The training came at an opportune time as Malawi has made a number of discoveries of green minerals including rare earths.

Under the Driving Just Resources Governance through open contracting and licensing project, Perekezi ASM Consultants and Events with funding from USAID is implementing the Powering a Just Energy Transition Minerals Challenge (JET Minerals change) project to promote transparency and accountability with the aim of curbing transnational corruption in green minerals.

Managing Partner for Perekezi Chikomeni Manda said though currently there is no corruption cases in Malawi as regards to green minerals they feel the high demand for the mineral can trigger corruption.

Manda said involvement of the CSO and media in the training is to ensure that they understand the significance of the green minerals and whenever the corruption case arises, they have to recognize it.  

He said: “We are looking at these green minerals because they are getting a lot of attention from the world technologies; defense and many other applications.”

“Since these minerals are in high demand, they can bring a lot of corruption in the system. We, therefore, conducted this training to civil society and the media to ensure that they know the significance of these minerals.”

Manda said corruption practices in extractives sector negatively impact the economy of any country as it retards development.

He said: “If these minerals are well managed with ample revenues generated, Malawi we can see a very big change in terms of development.”

“As Perekezi we understand that civil society and media’s oversight role on corruption issues,” he said.

Meanwhile, the study that Perekezi conducted has established that the country’s extractive sector is being challenged by delays in both licensing processing and finalization of Mining Development Agreements (MDAs).

“From the study that we conducted we have seen that licensing process is something that takes a very long time while right now we have MDAs among us which the government has been negotiating for quiet long and we do not see any hope that they will been finalized anytime soon.”

“These delays can be recipe for corruption because investors want to start working. And can think of going through a back door to influence authorities,” said Manda.

In his presentation, Technical Expert and Manager for Malawi Extractive Industry Transparency Initiative (MWEITI) Leornard Mushane said there is more MWEITI is doing to support the anti-corruption drive which requires media support.

Mushane explained that the MWEITI secretariat requires support from the media in areas including dissemination of EITI reports whose main purpose is to disclose Information for all stakeholders to use.

He also disclosed that MWEITI has developed MWEITI Anti-Corruption Strategy as one way of fighting corruption practices in the extractives sector.

Mushane said the development of the strategy was prompted by the last corruption case that happened in the sector over license renewal for Ilomba Granite Mine in Mzimba district.

“MWEITI Anti-Corruption Strategy is the tool that we have developed through the support of the European Union sunder Chuma Cha Dziko project. The tool simply provides guidance on what to do to fight corruption in the mining sector,” he said.

The presenters at the workshop included Head of Mineral Rights Division, Mphatso Chikoti from the Department of Mines who was invited to tackle issues of Legal and Regulatory framework governing the extractives sector.

The Malawi Government has signed a charter securing membership in the Africa Minerals Strategy Group (AMSG) as one way of facilitating international cooperation in the minerals and mining sector among member African nations.

AMSG is an African body which promotes exploration, extraction, production, local beneficiation (value addition) and commercialization to ensure a sustainable, transparent and secure supply of critical minerals, while protecting the environment and improving the quality of life of the population, to spur the socio-economic transformation and prosperity of Africa, and support the energy transition.

Speaking at the signing ceremony in Lilongwe, Minister of Mining Monica Chang’anamuno commended the move saying it will spearhead the mission to safeguard African minerals including Malawi’s.

Chang’anamuno said the development will, among others, help in job creation and in local beneficiation as raw materials will be processed within Africa. 

She said: “We have today signed this charter to officially become members of the group in order to safeguard minerals of Africa.”

“For long time, we have been doing this as individual countries so others have taken advantage of that but this time, we have said no let us come together.”

“This will also help to create jobs for ourselves unlike in the past where people were taking our raw materials to utilize in creating job opportunities in their countries.”

“For instance, if we have a refinery for specific minerals in Malawi, other countries will be able to use that refinery. Likewise, Malawi will also be using refineries for other minerals that cannot be refined here in another African country, maybe in Tanzania.”

Malawi has joined the bandwagon of 16 AMSG founding member nations including Nigeria, Uganda, Democratic Republic of Congo, Tanzania, Botswana, Burundi, South Sudan, Zambia, South Africa, Sierra Leone, Guinea-Bissau, Chad, Somalia, Zimbabwe and Liberia.

In his remarks, Secretary General for AMSG Moses Micheal Engadu hailed the move by Malawi Government saying it has joined at an opportune time when the country has started developing its mineral sector.

Engadu said the country has vast unexploited key minerals that the Group is interested to protect and ensure that they benefit and improve African communities. 

He said: “What we signed today was a charter for the establishment of Africa Minerals Strategy Group. This is the intergovernmental coding established to facilitate international cooperation in the minerals and mining sector among African countries and also work with interested nations and strategic partners to explore opportunities to grow our mining sector.

“Our role is to promote local beneficiation and also to get fair deals for Africa for minerals. As you know we have vast mineral wealth across the continent but for the past years we have not benefited from these minerals as continent.”

“So our duty is to become a voice for the African continent and be able to negotiate better deals and also foster collaboration among our countries as some countries have experiences in mining and we want to bring those experiences to countries like Malawi which is just starting mining.”

Endagu further explained that currently, there is scramble for minerals used to produce electromagnets and Malawi has a number of those minerals yet to be exploited hence the need to join hands.

AMSG objectives centers on collaboration, resource sharing, investment opportunities, technological advancement, capacity building and, strategic partnership.  

In January this year, the Kingdom of Saudi Arabia became AMSG founding partner promising to invest in the African mineral assets through their newly launched $15-billion Manara Minerals Fund which is targeting four commodities namely copper, lithium, iron ore and nickel.

Civil Society Organisations (CSOs) working in Malawi’s extractive sector and the Chamber of Mines and Energy in Malawi say there is need for government to implement drastic reforms in order to ensure growth of the mining sector whose contribution to gross domestic product (GDP) remains stuck at less than one percent.

Coordinator for Natural Resources Justice Network (NRJN) Kennedy Rashid said for the sector to grow Government needs to fast-track the development of sector regulations, operationalize the Mining Regulatory Authority and the state owned mining company, review the existing concessions with mining companies to ascertain whether fair deals were negotiated, strengthen the legal framework for the fiscal regime rather than only relying on negotiated agreements and strengthen the capacity of Ministry of Mining and Malawi Revenue Authority in mineral commodity valuation .

Rashid said: “The sector has maintained the trend of contributing a very tiny percentage to the national economy for some years so it indeed requires some soul searching as a country to ascertain why despite all the steps taken, contribution of the sector to the economy is still very minimal.”

“We need to operationalize the state-owned company in order for Government to start directly participating in the mining sector. The lack of a formal vehicle for state equity in mining in Malawi has affected the general economic benefits from the sector.”

He said the country also needs to invest in various infrastructure for energy, transport and local value addition of various minerals.

Rashid said: “There is a need to work on country systems and infrastructure including technical infrastructure like industrial level mining laboratories, transport infrastructure and even energy.”

“Corruption is another vice that should not be condoned. As mining is a heavy investment sector it is always prone to corruption which can affect the general economic output of the sector through Illicit financial flows and tax evasion.”

Rashid said the contribution of the sector to the economy can increase through value realization, enabling environment for investment and prudent revenue management.

He said: “The weak licensing regime has been affecting the sector’s contribution to GDP for some time now and there is still a highly bureaucratic licensing system that delays the process due to political controls.”

 “The fiscal regime is still not reformed to be practical. Though the Mines and Minerals Act, the Taxation Act and other relevant laws that establish revenue streams in mining do exist in Malawi, concessions depend on negotiations and not the law as has been evidenced in the tax incentives that are negotiated in concessions.”

On the revenue collection systems, Rashid said that it is not clear how technically Government ascertains to some of the payments as it depends on the reports from the mining company to determine the amount of revenue to collect from a particular mining venture.

In a separate interview, Coordinator for Chamber of Mines and Energy Grain Malunga told Mining and Trade Review that the sector is not growing because it is sidelined as it is not given specific investment incentives.  

Malunga said the delay to conclude Mining Development Agreements (MDAs) is also frustrating large- scale mining companies.

 He said: “Malawi is promoting Agriculture, Tourism and Mining for wealth creation but mining has not been given specific investment incentives.”

“Those negotiating mining development agreements with companies seem to have preconceived ideas and look to mining companies as not negotiating in good faith.”

Artisanal and Small-scale Miners (ASMs) who export gemstones to overseas markets through the country’s airports have expressed concern over the conduct of the Malawi Defence Force (MDF)saying its officers at the airports are demanding too many documents in order to allow them export the minerals, which is detrimental to their trade.

The ASMs alleged in separate interviews that MDF officers are demanding that an exporter submits a copy of a Reserved Mineral Licence, Small Scale Mining Licence, an Export Permit, Certificate of Inspection from the Ministry of Mining and the Malawi Revenue Authority [MRA] clearance copy for the shipment to leave Malawi.

The mineral dealers claim that this trend is common at Chileka and Kamuzu International Airports such that a number of shipments are being held by MDF.

The ASMs are demanding that the Ministry of Mining comes out in the open to report to the industry whether this is a new requirement for exporting mining products other than being silent as those involved are being ‘victimised’.

In an interview, Chikomeni Manda a Small-Scale Mining consultant and Managing Partner for Perekezi ASM Consultants said what is happening is retrogressive and ought to stop at any cost.

Manda said: “In the long term, this practice will be a recipe for corruption.”

“The Ministry of Mining should engage MDF on this, as it is demotivating those who are exporting legally. The government is promoting formality of the mining sector and at the same time giving a few people doing things in the right way a hard time; you tend to wonder what does government really wants?” questioned Manda.

MDF Spokesperson Major Emmanuel Kelvin Mlelemba said the military body is not aware of the said allegations.

“We have not received any information to that effect. You may cross-check with the Ministry of Mining on requirements for mineral exporters,” he said.

Ministry of Mining Spokesperson, Tiwonge Kampondeni said she needed to cross-check with diverse stakeholders before officially responding to the allegations.