Australian firm set for Sh92 billion graphite project in Tanzania

Monday August 08 2022
Asimwe Kabunga

Australian firm Lindian Resources chairman, Asimwe Kabunga. PHOTO | COURTESY

By The Citizen Reporter

Dar es Salaam. The Australian firm Lindian Resources is focusing on raising $40 million (about Sh92 billion) for the first stage of its Bunyu graphite project in Mtwara Region.

This is after the company signed an agreement to acquire the globally significant Kangankunde rare earths elements project in Malawi for $30 million (about Sh70 billion).

Lindian Resources is listed on the Australian Securities Exchange (ASX), and boasts a portfolio of high-grade bauxite assets on both the West and East coasts of Africa

Company’s chairman and a major shareholder, Mr Asimwe Kabunga, told The Citizen that he has was impressed by President Samia Suluhu Hassan’s pro-business policies, and was looking forward to investing more in the country.

The Tanzanian-born Australian national is also chairman and a major shareholder of two other ASX-listed firms, Volt Resources and Resource Mining Corporation, both of which are heavily engaged in the exploration and development of battery minerals for the electric vehicle and energy storage industries.

“Volt has spent approximately $20 million to date advancing the large-scale Bunyu graphite project, and is in the funding phase to raise $40 million for the first stage development of the project followed by a second stage development that will cost approximately $170 million and place Tanzania as one of the largest producers of graphite globally,” Mr Kambunga said.

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Resource Mining Corporation, he added, had recently completed a drilling programme in the first of its nickel projects, and was in the process of acquiring a further five highly prospective nickel projects in eastern and southern Tanzania.

The company plans to invest in a large-scale exploration campaign in its Tanzanian projects with the aim of identifying and positioning itself as a future major producer of nickel for lithium-ion batteries.

“The companies I run have invested heavily in Tanzania and will continue to do so. Recent announcements of investment by international resource companies such as BHP show that the investment climate in Tanzania is improving, and I commend the government for working to encourage investment in exploration and development of resource projects,” Mr Kabunga said.

He added that resource exploration was an expensive and risky process, and the sector needed every assistance to encourage investment and provide the economic and social benefits that come from mineral developments. This is because mineral prices could be cyclical based on global supply and demand and we have seen relatively low prices for a number of years until recently.

Mr Kabunga said what Tanzania was now experiencing was a good opportunity for the development of its mineral assets to meet the significant forecast increase in demand for minerals used in technologies to support renewable energy and lower carbon emissions as part of the global response to reduce the impacts of global warming and climate change.

“Minerals such as graphite, nickel, cobalt, lithium, copper and rare earths will all be required in significantly larger quantities over the course of this decade and the next decade. The mining industry can position Tanzania as a major supplier of technology minerals and a key participant in this global change to new energy. Volt Resources and Resource Mining Corporation aim to be a part of the growth of the mining sector in Tanzania.”

Last week, Lindian Resources announced that it had signed an agreement to acquire the globally significant Kangankunde rare earths elements project in southern Malawi for $30 million.

In an article published by The West Australian – a daily newspaper published in Perth, Western Australia – Lindian said it aims to take full control of Kangankunde through a 100-percent share acquisition of Rift Valley Resource Developments, the project’s owner. The $30 million price tag is payable in four tranches, comprising a non-refundable deposit of $2.5 million followed by a further $27.5 million payable in three parcels within 48 months from the signing date of the agreement.

The company intends to fund the payments with its existing cash reserves of almost $2.2 million and from third parties that have already expressed considerable interest in gaining exposure to the project.

“This is without a doubt an outstanding development for Lindian that delivers a huge value opportunity for shareholders. The potential of the Kangankunde Rare Earths Project is indeed significant and it has been highly sought after by many parties over a number of decades.

“This binding transaction gives Lindian control of one of the world’s premier undeveloped rare earths deposits, at a time when global demand is universally forecast to accelerate materially in the years ahead,” Mr Kabunga said.

Kangankunde has been hailed as one of the world’s largest rare earths operations outside of China and follows the company’s pursuit of African projects.

Rare earths are a group of 17 elements with unique catalytic, metallurgical, nuclear, electrical, magnetic and luminescent properties.