Lindian Resources has thrown conventional thinking out the window at its flagship Kangankunde rare earths project in Malawi, declaring it will ditch contract mining in favour of a full owner-operator model.
Management says the decision marks a defining moment in the company’s development strategy. By taking more control of operations, tightening budget oversight and providing a greater degree of flexibility to quickly adapt to changing conditions from the ramp up, the company puts itself firmly in the driver’s seat for first production.
Under the new structure, Lindian will directly hire the manpower needed to mine Kangankunde’s high-grade deposit, while tackling all mining and processing operations in-house.
This shift comes with broader benefits than simple cheaper costs.By employing and training a dedicated workforce in Malawi, Lindian says it should deliver a stronger socio-economic impact in the region by building skills and creating jobs.
In turn, these changes may also help deepen the company’s relationship with government stakeholders. In a market where community and government support are often decisive, this could prove just as important as the financial savings.
At the coalface, the company has appointed open-pit veteran Samuel Boachie as mining manager to lead the charge. With more than two decades of experience across some of Africa’s top-tier operations, including start-ups and wet-season ramp-ups, Boachie is tasked with building a capable, safety-first Malawian team.
And after sifting through five contractor bids, Lindian has also backed itself to run the mining show in-house. By avoiding the margin clip taken by external contractors, the company expects long-term operating expenditure will be markedly lower, dropping from US$12 (A$18) per tonne to US$8.40 (A$12.70) per tonne – a saving of at least 30 per cent across the life of the mine.
Management says the numbers stack up even after taking the cost of its own mining fleet into account. Due to some savvy cost savings carved out of earlier site-based works, there is now enough cash in the tin to bankroll the gear without lifting overall capex costs and leaves the pre-production capital for stage one unchanged from the 2024 feasibility study.
Lindian argues the trade-off more than pays for itself over the longer term, particularly as Kangankunde is one of the biggest undeveloped rare earths deposits in the world.
Lindian Resources executive director Zac Komur said: “Execution is the priority. By preparing the plan and working the plan with our own fleet and team, we remove layers, protect margin and keep control where it matters.”
Kangankunde’s allure is hard to miss. It hosts a monster 261-million-tonne resource, runs high grade, processes with ease and, unlike many rivals, carries zero radioactive baggage.
For good reason, the project is widely considered one of the cleanest and most commercially attractive rare earths assets outside China – a combination not lost on market analysts when noting the rarity of the orebody.
The company has wasted no time putting its plans into motion. It says procurement of key mining equipment is already underway, and management has kicked off recruitment programs to build a local workforce capable of scaling up operations.
With trial mining, beneficiation test work and construction works advancing, Lindian is aiming to push Kangankunde into production by February next year.
And it seems the timing could not be better, as global demand for rare earths - critical for electric vehicles, wind turbines and defence technologies - continues to surge despite escalating supply chain tensions with China.
If the numbers land the way management expects, Lindian’s call to take full control of Kangankunde may not just be a cost-saving move, it could be the masterstroke that transforms a promising deposit into one of the world’s rare earths powerhouses.
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By James Pearson
