Lindian Resources, an Australian firm which is developing a rare earths project in Malawi, has secured a $20mn loan and 15-year offtake agreement from Iluka Resources, also of Australia.
The ASX-traded company will supply Iluka, also listed on the ASX, 90,000 tonnes over 15 years or 6,000 tonnes yearly of rare earth monazite concentrate from Kangankunde. The material will feed Iluka's Eneabba Rare Earths Refinery in Western Australia.
In a release on August 6, Lindian said the loan for the construction of the Kangankunde Rare Earths Project in the southern African country will have a five-year tenor.
Iluka will have right of first refusal for phase two production expansion at Kangankunde for up to a further 375,000 tonnes over 15 years or 25,000 tonnes per annum for 15 years. This will be subject to Iluka providing a 50% debt funding offer for the expansion capital cost and agreeing to Lindian’s revised commercial terms such as pricing mechanisms.
Lindian executive chairman, Robert Martin said the deal is a 'pivotal milestone' for the company and a 'major step' towards accelerating the development of Kangankunde.
'The funding and offtake agreements represent a major de-risking milestone for stage one of our Kangankunde Rare Earths Project, providing increased confidence for all our stakeholders by showing a clear pathway to production,' he said.
'The larger stage two production expansion has also been significantly de-risked, with Iluka having a ROFR for up to an extra 25,000t per annum of product if it makes an offer to fund 50% of the capital cost.”
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