Mkango Resources Limited, a Canadian-based mineral and exploration company, says it has progressed on its exploration works on the diamond drilling programme underway at the Songwe Hill Rare Earths Project in Phalombe.
This year marks the eighth since the company started exploration works in the country and a total of 6 558 metres of drilling have been completed, comprising 53 drill holes with a maximum depth of around 220 metres.
In a statement released on Friday, the company’s chief executive officer William Dawes said the drilling programme is on track and is expected to total up to
about 10 000 metres.
He said multiple zones of carbonatite— the primary host rock for rare earth mineralisation at Songwe—have been intersected to date, adding that results from the first batch of samples from eight drill holes totalling 944 metres are expected to be announced by the end of August 2018.
Said Dawes: “Mkango is developing one of the few advanced stage rare earths projects globally and is well positioned to benefit from growing demand for neodymium and praseodymium used in permanent magnet motors for electric vehicles.
“Our vision is to develop a major new sustainable source of rare earths in Malawi, with Mkango spearheading development of the sector and we are pleased with the support from Government of Malawi to fulfil this vision which includes commitments on infrastructure developments to enhance the already favourable operating environment.”
Between 2011 and 2012, the miner completed two successful drilling programmes at Songwe Hill, totalling about 6 850 metres and culminating in a maiden mineral resource estimate.
In an interview, energy and mining expert Grain Malunga, who is also former minister of Energy and Mining, described the development as positive news for the mining industry.
He, however, cautioned the country to be vigilant on deals of such nature to ensure they benefit the country.
“Obviously this is some news for joy for the country, but we need to be careful otherwise, we will end up being duped like the Kayelekera mine deal. We need to deploy our experts to be part of the process at every stage to avoid the Kayelekera scenario,” said Malunga.
In the current fiscal year, government amended the Value Added Tax Act to allow mining companies in the exploration phase to register for VAT to encourage mineral exploration.
Minister of Finance, Economic Planning and Development Goodall Gondwe said the move will reduce their costs, as the companies will be able to claim their input VAT.
He said investment in mineral exploration is risky and expensive; hence, the need for government to provide a conducive environment to attract mining exploration investments. n