Canada’s Mkango Resources, currently exploring rare earth minerals at Songwe Hill in Phalombe, says it aims to start production in Malawi in 2020.
Mkango Chief Executive Officer William Dawes told Reuters on Monday his firm expects to catch an expected leap in demand for the metals that are used in the production of electric vehicles and other new technologies.
Demand for rare earths, which range from neodymium used in electric motors to lanthanum used to make batteries, is increasing with the emergence of new, greener technologies.
While production of coal, iron ore and other bulk commodities is dominated by major mining firms such as BHP and Rio Tinto, rare earths are mostly produced by China and small mining firms such as Mkango.
“We think we will be in production in three years’ time, just at the right time,” Dawes is quoted as saying.
According to Dawes, by 2021, Mkango would reach full output of about 3,000 tonnes per year of rare earths from the southern African nation.
That would include 1,000 tonnes of praseodymium, neodymium, dysprosium and terbium, used in new electric motors.
Dawes said a rise in rare earth prices was being driven by growing demand, rather than the kind of speculative bubble that drove up prices in 2011 when China dominated production and then prompted a crash that pushed many explorers out of the business.
“Very few rare earth projects made it to the pre-feasibility stage and beyond,” he said. “We are one of the few companies to make it over this hurdle, so we are well-placed as the market recovers,” he said.
Dawes said any rapid surge in the price of neodymium, currently trading around $45 per kilogramme, could encourage the vehicle industry to turn to induction motors, which do not contain rare earths but which are heavier and less effective than permanent magnet motors that do use rare metals.
Mkango is a Canadian dual TSX-V and AIM listed mineral exploration and development company focused on rare earth elements and associated minerals.