Lindian Resources announced the completion of a feasibility study on Stage 1 of its Kangankunde rare earths project in Malawi. This study supports a technically robust and economically viable project.
Stage 1 includes mining operations, a mineral processing plant, and necessary support infrastructure. The results provide confidence for a potential future expansion, Lindian Resources said.
“The feasibility study reaffirms Kangankunde’s world-class status and competitive positioning,” said Lindian CEO Alwyn Vorster. “It is distinguished by high grade, low impurities, and an attractive cost structure, positioning it in the lowest cost quartile of rare earths projects globally.”
Stage 1 requires low upfront capital, presents low commissioning risk, and promises strong financial returns. Kangankunde is fully permitted to begin construction once financing is confirmed. The feasibility study prepared over ten months, involved extensive drilling, metallurgical testwork, detailed engineering designs, cost studies, and financial modeling.
“All key approvals, including the mining license, environmental license, and water permit, are in place,” Vorster added. “This enables construction to begin immediately once funding is secured.”
The project will create over 200 full-time equivalent roles during construction and more than 100 during operations. Stage 1 development confirms a technically low-risk and economically robust project, with a post-tax net present value (NPV) of $555 million, an internal rate of return of 80%, and annual earnings before interest, taxes, depreciation, and amortization (EBITDA) of $84 million.
Preproduction capital costs are estimated at $40 million, including a 12.5% contingency, making Kangankunde one of the lowest capital cost rare earths projects under development. The project’s average yearly free-on-board operating cost of $2.92/kg total rare earth oxides (TREO) positions it in the lowest-cost quartile of the global rare earths industry.
The project is expected to have a payback period of less than two years and a post-tax NPV to capital expenditure ratio of more than 10:1. This low-cost structure means that Stage 1 will deliver a positive yearly EBITDA at current low rare earth prices.
Stage 1 will produce an average of 15,300 tons per year of premium concentrate with a 55% TREO grade, low levels of radionuclides, and limited acid-consuming minerals. The premium concentrate will contain about 8,400 tons per year of rare earth oxides and about 1,640 tons per year of neodymium and praseodymium (NdPr).
No pre-stripping is required, with a low waste-to-ore ratio of less than 0.2:1. based on gravity and magnetic separation, the simple flowsheet requires limited reagents and utilizes low-cost grid power.
Kangankunde’s premium product specifications are attracting significant offtake interest. About 40% of yearly production is already contracted with US commodity trading group Gerald Metals.
Key development approvals are in place, and construction contract awards to preferred tenderers can occur shortly after securing funding. Multiple funding discussions are progressing with construction groups, trading companies, and strategic investors.
Vorster also noted that Lindian maintains a healthy cash reserve. The development schedule aims for funding confirmation in the third quarter, site construction to start in the fourth quarter, and commissioning of the processing plant in the fourth quarter of 2025.
The strong economics of Stage 1, coupled with the resource endowment of the Kangankunde project and robust market demand forecasts, provide confidence for a potential Stage 2 expansion to significantly increase yearly production. Lindian intends to start a Stage 2 expansion study this year.
Market research from Project Blue indicates that significant new supply will be required to meet increasing demand, particularly for NdPr, over the next three decades. This demand is driven by factors such as climate change, technological advances, resource scarcity, and geopolitical tensions.
The long-term demand for rare earths will continue to be dominated by magnet applications, with NdPr as a critical component. The magnet market is expected to be the largest growing sector, accounting for nearly 60% of the NdPr market by 2050. Project Blue forecasts that the NdPr market will triple by 2050, requiring an increase of two to three times above the 2023 supply to maintain balance.
Vorster emphasized that Lindian is well-positioned to respond to the increasing NdPr demand. The mine design indicates high conversion from indicated resources to ore reserves, using 46% of the indicated resources contained TREO for the 45-year mine life.
Lindian expects to confirm funding by the third quarter, award all key construction contracts early in the fourth quarter, start construction in the fourth quarter, and commission the process plant in the fourth quarter of 2025. The project is expected to generate its first revenue by early 2026.
Source: Mining Weekly
