Critical minerals developer Lindian Resources has inked a supply deal with a new partner flush with cash.
The company has revealed a fresh six-year agreement with freight shipping firm C&D Logistics, which will see it supply 23 million wet metric tonnes of bauxite from its Gaoual project in the West African country of Guinea.
Investors supported the news, pushing Lindian shares up more than 9 per cent in intraday trading to a high of 39.5 cents.
With the six-year deal period kicking off in 2025, the supply agreement notes the two companies will negotiate annually to fix the price, quantity, product quality, payment terms and delivery details.
Parent company of C&D Logistics, Xiamen C&D, has a strong financial position and is keen to expedite the development of the Gaoual project. Xiamen last year reported net after-tax profits of US$1.62 billion (AU$2.44 billion) and net assets of US$23.77 billion (AU$35.8 billion).
As the ink dries on the supply agreement, Lindian is well positioned to move forward and establish logistics infrastructure and anticipates a relatively low-cost capital spend to get the operation moving.
Lindian Resources executive chairman Asimwe Kabunga said: “The recent ban on bauxite exports from Indonesia has increased the demand for Guinea’s bauxite, and in some cases, accelerated project development activities. Today’s agreement reflects this. We have a relatively short window to achieve supply of the first 3 million WMT in 2025 which is less than two years away. As such, our immediate focus is to rapidly advance negotiations to lock in logistics infrastructure access, and secure contract mining services which ensures start-up capex is relatively modest given it’s a straightforward bulk mining, screening and transport operation.”
Much of the world’s aluminium comes from bauxite ore, making the Gaoual deposit body highly suitable for C&D Logistics. The project has an indicated mineral resource estimate of 102 million tonnes, with 84 million tonnes holding high-grade bauxite containing 51.2 per cent alumina.
Gaoual’s deposit is known as a “conglomerate bauxite” and is one of only two of its kind in Guinea – the other one being Sangaredi, which has been mined for 30 years. Conglomerate bauxite deposits are ore bodies that have been transported by water over millions of years and often have a thick layering. They regularly have a much higher grade and that fact was likely to have helped to attract a cashed-up partner.
While Lindian toils away to fulfill its new contract, it is also pushing ahead at its flagship Kangankunde rare earths deposit in Malawi.
In what could yet become the biggest rare earths operation outside China, Kangankunde already boasts an old resource of 2.53 million tonnes, holding some 4.24 per cent total rare earths oxide (TREO) for 107,000 tonnes using a cut-off of grade of 3.5 per cent. Mineralisation for almost every hole is at the surface and an updated JORC-compliant resource is expected this quarter.
A peek at early data shows the overall rare earths grade may surprise to the upside, with one assay returning a promising 14.9 per cent (TREO).
The International Energy Agency and the World Bank observes that countries such as Canada and the United States and others in Europe consider bauxite and aluminium a critical mineral, where Australia does not. Australia is currently the world’s biggest producer of bauxite, but Guinea – Lindian’s home turf – has the biggest known reserves.
Rapid investment and development in Guinea’s bauxite sector could yet see Australia’s production capacity pipped at the post.
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By Shae Russell
