Lindian Resources has entered into a strategic partnership with Iluka Resources to advance its flagship Kangankunde rare earths project in Malawi and establish a long-term revenue stream.
The deal includes a binding US$20 million (A$30.64 million) loan facility and a 15-year offtake agreement for 90,000 tonnes of rare earth monazite concentrate, equivalent to 6,000 tonnes annually. Iluka will process the concentrate at its fully integrated Eneabba rare earths refinery in Western Australia, a project co-funded by the Australian Government.
Iluka also holds the right of first refusal to participate in Kangankunde’s phase two expansion, which could add up to 375,000 tonnes of concentrate (25,000 tonnes annually for 15 years), contingent on Iluka funding 50% of the expansion costs and agreeing to Lindian’s revised commercial terms.
Finalisation of the loan remains subject to Iluka’s due diligence and customary conditions precedent. The facility has a five-year tenor, a grace period until project completion, and a weighted average interest margin of around 9.7%.
Kangankunde is expected to produce high-grade monazite concentrate with a 55% total rare earths oxide content over a 45-year mine life. Lindian is also progressing with its phase two expansion study, aiming to significantly increase output.
Executive chairman Robert Martin described the agreements as a major de-risking milestone for stage one of the project, securing floor price protection, offtake-linked terms, and no financial ratio covenants. He added that Iluka’s potential participation in stage two could further strengthen the project’s long-term growth prospects.
