Mkango bags Noble as partner in Malawi rare earths project

Mkango Resources has secured backing for its Songwe Hill rare earths project in Malawi by giving away a 49% stake to Noble Group's Talaxis subsidiary.

Talaxis has agreed to fully fund a bankable feasibility study for the the project, with a £12m investment in three tranches that will begin with a £2m slice once regulatory approval is granted.

The Noble Group unit will also have the option to acquire a further 26% interest in the Songwe by arranging funding for project development.

AIM- and Toronto-listed Mkango also tempted Talaxis with another 49% interest in a new venture to be established by Mkango focused on neodymium alloy powders, magnet and other technologies, including Mkango's collaboration with Metalysis, which the Noble unit can gain by investing another £2m.

If all the above investments are completed as planned, Mkango will retain a 25% interest in Songwe, free carried to production, and a 51% in interest in the new venture.

Mkango chief executive William Dawes said it was a "transformational" deal for Mkango and for Malawi.

"This agreement significantly strengthens our balance sheet whilst ensuring that the company is fully funded to progress Songwe and our collaboration with Metalysis."

He said the deal comes at a "pivotal time", with expected strong demand for rare earths such as neodymium and praseodymium for use in magnets for electric vehicles, wind turbines and other clean technology applications.

Daniel Mamadou, executive director at Talaxis, said: "The global push to decarbonize the economy is creating pressure on the supply of critical elements to the green tech sector. Environmental regulation and the policy changes are driving the price of technology metals. Supported by our access to global logistics capabilities, an extensive marketing network and a team of experienced professionals, Talaxis is pleased to enter into this agreement, which further strengthens our supply chain specialized in tech metal products."