Lindian Resources has locked in a US$20 million funding deal and a 15-year offtake agreement with Iluka Resources, underpinning the development of its Kangankunde Rare Earths Project and aligning with Australia’s Eneabba refinery ambitions.
- US$20 million secured term loan facility from Iluka over five years
- 15-year binding offtake agreement for 90,000 tonnes of Rare Earth Monazite Concentrate
- Right of First Refusal for Iluka on Kangankunde Phase 2 expansion funding and offtake
- Price floor set above Kangankunde’s production costs with downside protection
- Partnership supports supply to Australian Government-backed Eneabba Rare Earths Refinery
Strategic Partnership with Iluka
Lindian Resources has taken a significant step forward in advancing its flagship Kangankunde Rare Earths Project in Malawi by entering a binding strategic partnership with Iluka Resources. The agreement includes a US$20 million construction term loan facility and a 15-year offtake contract for Rare Earth Monazite Concentrate, providing both funding certainty and long-term revenue visibility.
This partnership is notable not only for the financial backing but also for its alignment with Iluka’s development of Australia’s first fully integrated rare earths refinery at Eneabba, Western Australia. The Kangankunde concentrate will feed directly into this refinery, which is partly funded by the Australian Government, reinforcing Australia’s ambitions to become a strategic hub for rare earths processing.
Robust Terms and Growth Potential
The US$20 million loan facility spans five years with interest capitalised during construction and no financial covenants, offering Lindian flexibility as it progresses construction. The offtake agreement commits Iluka to purchase 6,000 tonnes per annum of monazite concentrate for 15 years, with pricing linked to realised prices at Eneabba and a floor price set above Kangankunde’s expected production costs. This structure provides Lindian with downside price protection while allowing upside participation.
Importantly, Iluka holds a Right of First Refusal (ROFR) on Phase 2 expansion volumes, potentially up to an additional 25,000 tonnes per annum for 15 years, contingent on Iluka providing at least 50% of the expansion’s debt funding. This option lays the groundwork for substantial future growth and further de-risks the project’s expansion plans.
Project and Market Context
Kangankunde is positioned as one of the world’s most attractive rare earth projects, boasting a high-grade deposit with low deleterious elements and radionuclides. Its operating costs are expected to be in the lowest quartile globally, making it viable even at current subdued rare earth prices. The strategic partnership with Iluka not only secures funding and offtake but also integrates Kangankunde into a broader rare earths supply chain anchored by the Eneabba refinery, which is set to commission in 2027.
Lindian’s Executive Chairman, Robert Martin, highlighted the transformational nature of the deal, emphasizing the multi-decade revenue certainty and the de-risking of both Stage 1 and the potential Stage 2 expansions. The partnership also aligns with government objectives to bolster critical minerals processing domestically, adding a layer of strategic significance beyond commercial terms.
Next Steps and Due Diligence
While the agreements are binding, drawdown of the loan facility remains subject to Iluka’s confirmatory due diligence and customary conditions precedent. Lindian has engaged independent technical and legal experts to support this process. Meanwhile, the company continues to advance its Phase 2 expansion study, with the strategic partnership providing a clear pathway to scale production significantly if the expansion proceeds.
Overall, this deal marks a pivotal milestone for Lindian, providing a credible and well-structured foundation to accelerate Kangankunde’s development and secure its place in the global rare earths market.
Bottom Line?
Lindian’s partnership with Iluka not only secures critical funding and offtake but also sets the stage for Kangankunde’s growth amid evolving rare earths market dynamics.
Questions in the middle?
- Will Iluka complete its due diligence and draw down the full US$20 million loan on schedule?
- How will the pricing mechanism perform amid fluctuating rare earth oxide prices and potential government support?
- What are the timelines and feasibility outcomes for the Phase 2 expansion and Iluka’s potential funding role?