Lindian Resources has secured a $50 million funding deal with Gerald Group. This funding will help drive the development of the Kangankunde Rare Earths Project in Malawi. The partnership will support the first phase, which focuses on producing high-value monazite concentrate. The deal includes equity, convertible instruments, and prepayment loan facilities. Lindian estimates the capital expenditure (capex) for phase one at $40 million.
Funding and Project Development
The $50 million funding package will cover both capital and operational expenditures. This includes establishing an initial stockpile of monazite concentrate. The first phase will produce premium monazite concentrate, expected to generate substantial revenue. Projections estimate an annual EBITDA of $84 million. Additionally, Gerald Group will secure full offtake rights for phase one and partial rights for subsequent phases. Gerald will also influence decision-making by nominating directors to Lindian’s Malawi subsidiaries.
Financial Outlook and Economic Impact
The Kangankunde Rare Earths Project is located 90 km north of Blantyre. The first phase will produce 15,300 tonnes per year of monazite concentrate. This concentrate is vital for producing rare earth elements, which are critical for electronics and clean energy industries. The project has a post-tax net present value (NPV) of $555 million and an internal rate of return (IRR) of 80%. The payback period is projected at just two years.
Strategic Importance of the Partnership
The agreement with Gerald Group is a key milestone for the Kangankunde project. Lindian Resources CEO Alwyn Vorster emphasized that the partnership accelerates the company’s efforts. It will help scale up low-cost, high-purity rare earth production. Phase one construction is set to begin in the first half of 2025. This is in response to the growing global demand for rare earth materials crucial to high-tech industries.
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