Kangankunde is well on its way to stage 1 production, in which the project is set to churn out 15,300t of concentrate annually, including 1600t of NdPr, over an uncapped 45-year mine life. And that’s just the start.
With a pre-production capex of just US$40 million (A$64 million) and operating costs of US$2.92 per kilogram of rare earth oxides, the project sits in the lowest cost quartile globally.
Even at today’s depressed rare earths prices, Lindian’s feasibility study projects a pre-tax net present value of US$794 million (A$1.225 billion) and an internal rate of return of 99 per cent to give a one-year payback.
The Iluka partnership looks like a masterstroke for both parties. The offtake locks in 6000t per annum of feed for Iluka’s Eneabba rare earths refinery in Western Australia – Australia’s first fully integrated, government-backed rare earths facility, slated for commissioning in 2027. The pricing will be tied to Eneabba’s realised NdPr oxide prices, offering a floor price likely to dwarf Kangankunde’s already profitable production cost.
If Iluka secures government price support, Lindian will get a slice of that upside too. It also has a right of first refusal clause in the deal for an additional 9600t of NdPr after the initial offtake and up to 25,000t per annum for a phase two expansion at Kangankunde, provided Iluka funds 50 per cent of the expansion capex.
Lindian Resources executive chairman Robert Martin said: “The funding and offtake agreements represent a major de-risking milestone for Stage 1 of our Kangankunde rare earths project, providing increased confidence for all our stakeholders by showing a clear pathway to production. The larger Stage 2 production expansion has also been significantly de-risked, with Iluka having a ROFR for up to an extra 25,000 tonnes per annum of product if it makes an offer to fund 50% of the capital cost.”
Lindian says a stage 2 expansion would potentially triple output down the line, using the same low-risk gravity-magnetic flowsheet that makes the mining so simple. The project impressively requires no flotation, no reagents, no waste dams and has a negligible stripping ratio of 0.2.
Iluka’s US$20 million secured term loan comes with a five-year tenor at a 9.7 per cent average interest margin, with no financial covenants or penalties for early repayment.
Lindian can also raise an additional US$7 million working capital facility, giving it the flexibility to fully fund Kangankunde’s Stage 1 build. First production is targeted for 2026.
The deal doesn’t just de-risk Stage 1 – it lays a rock-solid foundation for growth. Iluka’s terms for Stage 2 funding signal confidence in Kangankunde’s scalability.
With a 45-year mine life, a flowsheet that’s as simple as it gets and a partnership to supply Australia’s critical minerals strategy for the foreseeable future, Lindian is no longer just a junior with potential – it’s emerging a serious future cornerstone in the global rare earths race.
Is your ASX-listed company doing something interesting? Contact: mattbirney@bullsnbears.com.au
