The Department of Geological Survey has commended Mkango Resources Limited, a Canadian mining company exploring for rare earth elements at Songwe Hill in Phalombe for publicising preliminary feasibility study results.
The department’s director, Jalf Salima, told Business News on Wednesday that the Toronto Stock Exchange (TSX)-listed company has also managed to conduct explorations in a short period.
“It is good news when companies do explorations and come in the open for everyone to see,” he said, adding that with the announcement of the positive pre-feasibility study results, the company might start mining in three years’ time because it still has work to do.
“They have to finalise a feasibility study, environmental and social impact assessment and development, then later apply for a mining licence and negotiate mining agreement with government, which is a long process,” said Salima.
Mkango Resources chief executive officer Will Dawes has described the outcome of the pre-feasibility study as a major milestone in development of the project.
“This is a major milestone in the development of the project. Since listing in 2011, Mkango has progressed in an early stage exploration project to one of only three rare earth projects in Africa with a pre-feasibility study or feasibility study announced. We are very encouraged by the project’s strong returns and relatively low capex [capital expenditure],” he said in a statement.
The study pegs the capital expenditure at $217 million (K109 billion), including a contingency of $20 million (K10 billion) which Dawes described as among the lowest in the rare earth sector.
According to Dawes, the study supports the declaration of a maiden probable mineral reserve estimate of 8.5 million tonnes, grading 1.6 percent total rare earth ore (Treo) for the project operations and is based on an open pit operation using contract mining to start in 2017.
“There is potential to significantly expand production or the mine life and for a lower strip ratio given the large additional inferred resource and potential to expand the mineral resource. This first phase of development envisages production of a high grade, critical and heavy rare earth enriched, purified chemical concentrate for toll treatment or sale, with annual production of approximately 2 840 tonnes per year,” reads part of the report.
The company’s president Alexander Lemon said with the ongoing support of the Ministry of Natural Resources, Energy and Mining as well as the communities surrounding the project, Malawi has potential to be a leading sustainable producer of rare earths on a global scale.
“We are proud to be spearheading this initiative with the government and people of Malawi,” he said.
Rare earths are a group of 17 chemically similar metallic elements, which play a vital and increasing role in a wide range of consumer electronics, environmental technologies and military applications.
The Canadian mineral exploration and development company is focused on rare earth elements and associated minerals in the country through its whollyowned subsidiary Lancaster Exploration Limited with a 100 percent interest in two exclusive prospecting licences, covering a combined area of 1 751 square kilometres at Thambani and Songwe Hill in Phalombe.