ASX-listed bauxite explorer, Lindian Resources, has agreed to take full ownership of the Kangankunde rare earth element (REE) project in southern Malawi, through a 100% share acquisition of Rift Valley Resource Developments, the project’s owner.

According to the terms of the agreement, Lindian will have to pay US$30M over four tranches within four years of the signing date. Final signing is anticipated to take place next month and is subject to shareholder approvals. With a mining concession already in place, the company’s initial focus will be to advance previous technical work through a drilling and sampling programme for metallurgical studies.

The Kangankunde project is a carbonatite-hosted REE deposit containing the light rare earth (LREE)-bearing mineral monazite, as well as lesser amounts of strontianite, apatite and manganese concentrations. Evidently, Kangankunde is ranked among the highest grade REE deposits, outside of China, with an inferred mineral estimate of 107,000t of total rare earth oxides (TREO) at an average grade of 4.24%. Although the project has undergone several phases of exploration, it did not take off due to litigations that arose with joint venture partners. Aside from Kangankunde, Malawi is also host to the Songwe Hill REE project, which is scheduled for commission in 2025.

Rare earth elements are considered critical and strategic material and are becoming increasingly important for industrial application in the automotive, renewable energy, defence, and high-technology industries. Because of the projected gap between future demand and supply, many governments are focussing on diversifying REE production through developing new REE sources and recycling initiatives. Despite significant efforts in the recycling of rare earths, geological sources, such as carbonatite deposits, are likely to remain the dominant source of REEs in the short-medium term.

The rare earth landscape is becoming increasingly competitive and is rapidly evolving, with many non-REE focussed mining companies diversifying portfolios through acquiring REE projects. While these companies are eager to ramp up domestic supply chains, the biggest challenge remains in the extraction of REEs, which is still a complicated process due to several technical and political hurdles.