Malawi niobium project clears key hurdle
The government of Malawi has approved the Mining Development Agreement (MDA) for the Kanyika niobium project being developed by ASX-listed Globe Metals & Mining.
Globe said late last month that the approval of the MDA was a significant milestone for the company, and with all other approvals in place, allowed the company to accelerate its engagement with the local community to start relocation plans for those affected by the proposed mining process.
Moreover, the MDA carries broader implications for the electric vehicle industry as it aims to facilitate the introduction of the fourth niobium mine in the world, the entry of the first such mine into production in the last 50 years, and the first in Africa.
The MDA will require Globe to make an investment decision within 24 months of being granted a mining licence for the project and obtaining a credit-approved term sheet from a third-party financier, with the company required to spend at least $200-million to develop the project, starting six months following a decision to mine.
The Malawi government will receive a 10% equity interest in the project, with the option to acquire a further 10% interest on completion of the construction, commissioning and startup of operations. The government will also receive a statutory royalty of 5% on all revenue earned from the mining and processing of ore at Kanyika, while the Kanyika community will receive a 0.45% royalty.
"The MDA signifies the most significant milestone for Globe in its endeavour to develop the Kanyika niobium project. With this ultimate approval and final agreement in place, all parties concerned can now focus their efforts and resources on making the Kanyika project the first niobium mine in Africa and Globe the first new niobium producer in over 50 years,” said Globe chairperson Alice Wong.
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