Lindian grabs 100 per cent of Guinea tier-1 bauxite project

Lindian Resources has executed a binding agreement to grab the remaining 25 per cent share of the Lelouma bauxite project in the West African nation of Guinea, boosting its ownership stake to 100 per cent of the tier-1 asset. 

It will achieve full ownership of Bauxite Holding (formerly Sarmin Bauxite Ltd) by acquiring the remaining 25 per cent interest from minority shareholders. Bauxite Holding fully owns the Lelouma project.

After acquiring 100 per cent of Bauxite Holding, Lindian will assume full control of the impressive Lelouma project’s planning and development.

The company will be targeting direct shipping ore from the current resource containing a whopping 900 million tonnes at a grade of 45 per cent aluminium oxide, or alumina, and 2.1 per cent silicon dioxide.

The direct shipping ore will not require processing or upgrading with beneficiation.

Lindian has already considerably advanced its discussions with potential port and infrastructure partners to ship the ore.

The resource includes a measured and indicated component of 398Mt at 48.1 per cent alumina, which contains continuous high-quality zones exceeding 50 per cent. Additionally, the resource has a higher confidence measured resource of 155Mt going 47.9 per cent alumina.

The company entered an agreement to acquire 75 per cent of Sarmin in September 2020, which then held full ownership of Lelouma. Under the agreement, the transaction comprised a series of milestones for Lindian to meet, including completing a definitive feasibility study and an applicable mining concessions grant.

Lindian’s new board recently reviewed all the company’s assets and found it had not met its milestones within the agreed timeframe, which threatened to reduce its stake in Lelouma to 5 per cent.

Management quickly started negotiations to purchase the balance of 25 per cent in Bauxite Holding and be released from its obligations under the original agreement.

The company secured the 25 per cent share by issuing 20 million shares and a 1 per cent royalty to the vendors. The shares will be escrowed for six months.

Lindian’s board is also reviewing its asset base in Guinea and Tanzania, and will sell or relinquish non-core assets.

Lindian Resources executive chairman Robert Martin said: “The company is pleased to have resecured 100 per cent ownership of this world class asset, we can now invest in the project’s continued development unencumbered by time constraints, multi-million-dollar milestone caveats and minority partners.”

Martin said the company believes the Lelouma project can play a substantial role in meeting an anticipated rising demand for aluminium and its related products for electric vehicle production. This market is estimated to reach about US$18.5 billion (A$29B) by 2030.

Given Lindian’s commitment to develop its flagship world-class Kangankunde rare earths project in Malawi, the company plans to hire a new in-country management team to drive Lelouma’s development. 

The team will be laser-focused on Lelouma’s permitting, port and rail access, product offtake agreements, any government concessions available for the project and all government relations.

The previous owners invested more than $10 million into the project, which is about 100 kilometres northeast of the CBG rail line, which is in turn 100km northeast of Kamsar port. The port exports 25Mt of bauxite per annum.

The company says its Kangankunde rare earths project, which sits in the southern part of Malawi bordering Mozambique, is one of the richest rare earth projects on the planet, with its whopping 55 per cent total rare earth oxides.

The deposit has an ultra-low iron content and will require less chemical use to process, helping to cut costs and smooth the path through environmental approvals. 

The Kangankunde deposit also has minimal uranium and thorium levels, which will provide a massive benefit as European and North American regulators tighten the screws on radioactive thresholds.

Kangankunde contains a massive 261 million tonnes grading a superb 2.14 per cent total rare earth oxides. The magnet rare earths neodymium and praseodymium comprise 20.3 per cent of the project’s total rare earths.

The project has a mammoth 1.1Mt of high-value magnet rare earths. Today’s price averaging about US$65,000 (A$101,000) per tonne of neodymium and praseodymium provides an indication of its value.

Lindian is pursuing a two-pronged approach for rare earths-alumina in Africa and may have picked a winning project duo to generate the metals needed for future clean-energy requirements. 

Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au