Lindian Secures $20M Loan and 15-Year Offtake for 90,000 Tonnes Rare Earths

Strategic Partnership Secures Kangankunde’s Future

Lindian Resources has taken a significant step forward in developing its flagship Kangankunde Rare Earths Project in Malawi by entering into a binding strategic partnership with Iluka Resources. The agreement includes a US$20 million (~A$32 million) construction term loan facility and a long-term 15-year offtake contract for Rare Earth Monazite Concentrate, providing both funding certainty and a guaranteed market for the project’s output.

The partnership is notable not only for the financial backing but also for its alignment with Australia’s critical minerals strategy. Iluka’s Eneabba Rare Earths Refinery in Western Australia, partly funded by the Australian Government, will process the concentrate from Kangankunde, reinforcing Western Australia’s position as a downstream processing hub for rare earths.

Robust Terms and Growth Potential

The loan facility offers a five-year tenor with interest capitalised during construction and no financial covenants, reflecting confidence in the project’s viability. The offtake agreement commits Iluka to purchase 6,000 tonnes per annum of monazite concentrate over 15 years, with a floor price set above Kangankunde’s expected production costs, providing Lindian with downside price protection. Additionally, the pricing mechanism includes upside exposure linked to the realised price of neodymium and praseodymium oxides, key rare earth elements.

Importantly, Iluka has secured a Right of First Refusal (ROFR) for a potential Phase 2 expansion, which could increase production by up to 25,000 tonnes per annum for another 15 years, contingent on Iluka providing at least 50% of the expansion’s debt funding. This option lays the groundwork for substantial growth, subject to future feasibility studies and commercial terms.

De-Risking and Market Positioning

The Kangankunde project boasts a high-grade deposit with a 45-year life of mine and operating costs in the lowest global quartile. The strategic partnership with Iluka de-risks the project by securing cornerstone funding and a long-term buyer, which is critical in the capital-intensive rare earth sector. The floor price and government price support mechanisms further mitigate commodity price volatility risks.

Executive Chairman Robert Martin highlighted the milestone nature of the deal, emphasizing its role in accelerating project timelines and enhancing shareholder value. The agreement also strengthens Lindian’s position in the global rare earths supply chain, which is increasingly important given the strategic significance of these minerals in automotive, energy, and defense technologies.

Looking Ahead

While the binding term sheet and offtake agreement mark a major advancement, the loan drawdown remains subject to Iluka’s confirmatory due diligence and customary conditions. Lindian is also progressing its Phase 2 expansion study, which could unlock further production and revenue growth if Iluka exercises its ROFR and funding options.

This partnership not only secures Kangankunde’s near-term development but also positions Lindian to capitalize on the growing demand for rare earths, supported by government initiatives and global supply chain diversification efforts.