by Marcel CHIMWALA, Publishing Editor
As reported in our lead article, Mkango Resources, which is prospecting for Rare Earth Elements (REE) at Songwe Hill in Phalombe has announced results of a Definitive Feasibility Study (DFS) which have confirmed Songwe as one of the very few REE projects globally to have reached the DFS stage, with a full Environmental, Social, Health Impact Assessment completed.
The DFS has pegged the net present value for the project at US$559.0 million post-tax, using a 10% nominal discount rate, with an internal rate of return of 31.5%, payback period of 2.5 years from full production (5 years from start of capital expenditure) and post-tax life-of-operations nominal cash flow of $2.1 billion.
Mkango Resources, which is currently negotiating with Government for a Mining Development Agreement (MDA), has come up with the latest DFS results after prospecting for REEs at the site through its subsidiary Lancaster Exploration for the past 12 years in which it has invested millions of dollars.
We hail Mkango for the tremendous work which has helped in putting Malawi on the map as a country with overwhelming potential to start mining REEs, which have a growing demand for the production of strong magnets to manufacture electric vehicles and wind turbines.
As Minister of Mining Albert Mbawala, who visited the exploration site is quoted in the article, it is important that this project moves to production stage so that it immensely contributes to government’s industrialisation drive propagated in Malawi 2063 national economic vision.
We, therefore, urge the negotiating teams for the MDA from both the government and Mkango to work in harmony to ensure that the MDA is signed and a mining license is granted for the project to move into production.
We would also like to urge government Ministries to work in coordination to ensure that mining starts at Songwe Hill.
As Mbawala is quoted in the article, his Ministry is talking to the Ministry of Energy to connect Songwe Hill, which will need 25MW when mining works start, to the national electricity grid..
We urge the Ministry of Energy to treat this request for power from the Ministry of Mining as a priority since mining is a priority sector in Malawi 2063.
As Mkango President is quoted in the article, the Songwe Hill Project can help Malawi to overcome its economic problems if it moves into production stage mainly through remittances of taxes and royalties, and provision of employment and business opportunities to Malawians.
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