PERTH (miningweekly.com) – 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 on Wednesday 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 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.

“It has been a long journey and it is only through the strong support of the Malawi government and local communities, and the perseverance and professionalism of Globe’s management, that the signing of the MDA has finally come to fruition. We look forward to continuing to work closely with the Malawi government and its people over the life of the project and making it a success for all.”

Globe CEO Grant Hudson said that the company would now focus on the next key priority, which was raising development financing for the mining project which stands as the only vertically integrated niobium producer outside the Americas.

“In addition to this, we can now focus on finalising key milestone processes such as the relocation of project-affected persons and entering contracts for the provision of mine plant and equipment.

“The Kanyika niobium project has taken a major stride forward with the signing of the MDA and is now effectively ‘shovel ready’ with all environmental and land approvals already in place. The terms of the MDA are reflective of Malawi’s favourable legislation and political goodwill, making foreign investment very attractive while at the same time supporting long-term stability and wealth creation for the Kanyika people and Malawi as a whole,” Hudson said.

Globe is now in a position to extract a 10-t sample from the project area for the crushing, grinding and floatation tests to produce a concentrate sample for the pilot plant and offtake samples. The company will also conduct a new feasibility study to support the capital cost estimate, operating cost summary, and financial model on Globe’s Namibia plant as part of its downstream strategy as well as conducting the revised feasibility study.