Mkango Resources Ltd on Monday announced it has signed a mining development agreement with the Malawi government for the Songwe Hill project, Malawi.
Mkango is a Malawi-focused producer of recycled rare earth magnets, alloys and oxides.
The Songwe Hill project will target rare earths neodymium, praseodymium, dysprosium and terbium to be used in the production of permanent magnets for electric vehicles, wind turbines and electronic devices.
Mkango shares were up 52% to 7.00 pence per share in London on Monday morning.
The MDA includes a 5% royalty of gross revenue, a 30% corporate tax rate, and a 10% non-diluting equity interest in the project to the Malawi government. Mkango will be granted exemption from customs and excise duties.
The MDA was signed by British Virgin Islands company Lancaster Exploration Ltd and Malawi-based company Lancaster Exploration Ltd, both 100% owned subsidiaries of Mkango.
President of Mkango Alexander Lemon said: ‘We are very pleased to announce this major milestone for the company and the nation of Malawi. I am delighted that the MDA has been agreed and signed with the government of Malawi. The project, when developed, is expected to be a game changer and transformational for Malawi and Mkango welcomes the very strong support it is receiving from the government of Malawi and all stakeholders. When developed, my hope is that Songwe Hill will catalyse a new industrial revolution in Malawi, creating employment opportunities, producing high value-added exports, as well as further unlocking Malawi’s mineral potential and new infrastructure developments’.
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