Malawi a fresh source of rare earths

Africa Mining Intelligence
Asian investors on the lookout for rare earths are casting lustful eyes on Malawi, a country long the favorite haunt of uranium explorers. Two recent transactions have pushed the country to the forefront in the hunt for metals described by some as “the vitamins of modern industry.”

Dormant in recent years, a project for rare earth oxides called KGK (Kangankunde Carbonite Complex) came back to life in early 2011 when Australia’s Lynas Corporation Ltd finally concluded an agreement to buy the project after negotiations that began, in fact, in 2007. Subsequently, a key alliance was forged end of March between the Japan Oil, Gas & Metals National Corporation (JOGMEC) and the Japanese trader Sojitz Corporation. The two partners are to inject no less than USD 250 million into Lynas, which also owns a world class rare earths project in Australia (Mount Weld) in return for an annual supply of 8,500 tons of rare earths products. That’s 30% of Japan’s current market. The transaction was mulled by the trade and industry minister Banri Kaieda. To finance the deal, he used up the rest of the country’s budget for rare earths in the 2010 fiscal year.

Also in Malawi, Globe Metals & Mining Ltd last week finalized an important tie-up with the East China Mineral Exploration & Development Bureau (ECE), which provided for ECE to invest AUD 47.85 million in Globe. Globe, also an Australian explorer, owns a niobium, tantalum and zircon project at Kanyika, which is due to begin producing in 2013, as well as the Machinga rare earth project (under an option pact with Resource Star Ltd).