Lindian kicks off downstream tests for huge Malawi rare earth project

Lindian Resources is starting metallurgical test work of its high-grade Kangankunde monazite from Malawi, helped by Australia’s top nuclear scientific organisation, to target a market-ready mixed rare earth carbonate (MREC).

The Sydney-based Australian Nuclear Science and Technology Organisation (ANSTO) will test acid and alkaline cracking methods in parallel to pinpoint the most economical way of producing a usable carbonate product, prior to the company generating a final certificate of analysis. 

Lindian aims to shift its end product up the value chain by moving beyond raw concentrate sales and into the more lucrative world of refined carbonate rare earths.

The company says that producing MREC will boost Lindian’s margins and provide a seller advantage over its peers with downstream buyers, alloy manufacturers and through electric vehicle supply chains.

Lindian says the test work results will also help unlock strategic partnerships, offtake deals and potential prepayments or equity investments from global end users.

Kangankunde is a globally important rare earths project with a sky-high 55 per cent total rare earths oxide (TREO) grade and a low iron content. 

The deposit also has uber-low uranium and thorium levels, which is strategically important for the European and North American markets where regulators are increasingly clamping down on radioactive thresholds.

Management argues that the material is the best rare earth feedstock on the planet. Its ultra-high specs mean Lindian can slash chemical use in production, easing environmental hurdles. This will enable the company to fast-track its permitting, cut its capex and deliver a cleaner, purer end product.

Lindian Resources non-executive director and chairman of project delivery and technical committee Zac Komur said: "This is not just a concentrate, it's a high-performance, no-penalty, strategically critical input to the global rare earth supply chain, capable of meeting the most demanding technical and regulatory requirements.”

Lindian also expects to kick off stage one construction work at site in the next few months supported by a low-capex, low-opex feasibility study handed down last year.

The 2024 report lifted the lid on a compelling new set of financial numbers for its giant Kangankunde project, delivering a post-tax net present value of US$555 million (A$925M) using an 8 per cent discount rate to deliver a whopping annual EBITDA of US$84M (A$140M) across a 45-year mine life.

The stage one development is estimated to cost a very reasonable US$40M  (A$66.5M) in pre-production capital including a 12.5 per cent contingency buffer and will pay for itself in less than two years. First production is targeted for 2026.

Sitting on a 23.7 million tonne resource at 2.9 per cent TREO, first stage annual production is expected to come in at 15,300t running at a TREO grade of 55 per cent. 

Kangankunde is in the industry’s lowest cost quartile with a forecast average annual free-on-board operating rate of just US$2.92 per kilogram TREO. 

As Beijing continues to roll out fresh export controls on rare earth technologies and global manufacturers scramble to secure a non-Chinese supply, Lindian’s test work - ahead of fast-track downstream processing - could not come at a better time. 

With first output targeted for next year, Lindian appears to be in a sweet spot as a highly sought after ready-to-go source with a top-tier product and scalable production.

Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au