Rare earths developer Pensana (LSE:PRE) has received approvals for the full financing totalling US$268 million ($424 million) for its Longonjo rare earth project in Angola.
The Africa Finance Corporation (AFC) has approved its US$81.2 million participation in an US$160 million syndicated loan facility alongside major South African bank Absa Bank.
The funding is subject to the conclusion of definitive loan documentation and the fulfilment of conditions precedent contained therein. Pensana says the facility will provide senior funding for the phase one development of the company’s Longonjo rare earth mine through its 84% owned subsidiary Ozango Minerais.
The facility will comprise some 60% of phase one project funding. In addition to the US$15 million bridging loan already provided by the Angolan Sovereign Wealth Fund (FSDEA), the balance of phase one funding will be provided through equity, with FSDEA having approved an investment of US$38 million in the form of equity and a convertible loan.
FSDEA Chairman Armando Manuel says the Longonjo project holds strategic significance for the Angolan Sovereign Wealth Fund as part of its commitment to advancing the national mining sector.
“Beyond its substantial economic impact – such as job creation and tax revenues –the project plays a crucial role in establishing in Angola a key segment of the value chain for an industry essential to the global energy transition,” Manuel says.
The AFC has approved an investment of US$54.9 million in the form of a convertible loan. The equity investments will be at subsidiary level and are also subject to the conclusion of definitive documentation and the fulfilment of conditions precedent contained therein.
Commenting on the financing, CEO of Africa Finance Corporation Samaila Zubairu says with approximately one-third of the world’s rare earth mineral reserves, Africa is poised to become a cornerstone of the global clean energy revolution.
“By investing in Africa’s rare earth sector, we are not only accelerating regional development but also strengthening global energy security in line with the aspirations of the Mineral Security Partnership,” says Zubairu.
Pensana has spent more than US$70 million over the past six years on exploration, technical and environmental studies on Longonjo, which is located in the Huambo district of Angola about 350km southeast of the capital Luanda.
The company has delineated a near surface JORC compliant reserve of 30 million tonnes grading 2.55% TREO containing 166,000 tonnes of NdPrO has been delineated making it one of the world’s largest undeveloped magnet metal rare earth deposits with a mine life of over 20 years.
Pensana Chairman Paul Atherley says electrification of motive power is arguably the biggest energy transition in history and needs rare earths for permanent magnets. Once in full second phase production the mine will produce around 5% of the world’s production in the form of a high value mixed rare earth carbonate, capable of being converted into permanent magnets for electric vehicles and offshore wind turbines.
“The Longonjo project will produce an average of around 20,000 tonnes per annum of clean high value MREC and will have a major positive impact on the community, creating over 430 high value processing jobs,” the Chairman says.
“Over 50% of the jobs created are expected to be allocated to young people as well as supporting local businesses, service providers and farmers. Once in full second phase production, the project will create an estimated 2,400 direct and indirect jobs and will produce around 5% of the world’s magnet metal rare earths used for diverse applications including wind turbines and electric vehicles.”
The Longonjo operation will extract, concentrate, calcine and chemically refine the free dig material to produce a high-value mixed rare earth carbonate (MREC) to be railed 273km to the Atlantic port of Lobito for export.
Write to Adam Orlando at Mining.com.au
Images: Pensana
