Songwe Hill Rare Earth listing on Nasdaq in Q4

Revitalizing Malawi’s Economy: US$175m Loan Ignites Rare Earths Project, Fueling Growth and Prosperity

Post was last updated: December 6, 2025

Key Business Points

  • Mkango Resources Limited is on the verge of securing a $100 million direct loan from the US Government-owned International Development Finance Corporation (DFC) for the development of the Songwe Hill Rare Earth Project.
  • The project has been identified by the European Union (EU) as a priority project for critical battery materials under the EU Critical Raw Materials Act, which is expected to increase the EU’s security of supply of rare earths.
  • The development of the project is expected to boost investor confidence and provide a stable and strong market for Malawi’s rare earth projects, with the EU being a key market.

The news of Mkango Resources Limited securing a $100 million direct loan from the DFC is a significant development for Malawi’s business community, particularly in the mining sector. The loan will be used to develop the Songwe Hill Rare Earth Project, which is one of the few rare earths projects to have progressed to the definitive feasibility stage. The project has an expected mine life of 18 years and will produce a 55 percent mixed rare earth carbonate, yielding 1,953 metric tonnes per annum. This development is expected to validate Songwe Hill’s strategic importance to global rare earth supply chains and complement Mkango’s broader financing strategy.

The company has also signed a business combination agreement with a Cayman Island firm to form a global "vertically integrated rare earth company" that will focus on supplying mined, refined, and separated rare earth oxides to markets across North America, Europe, and Asia. This move is expected to increase the company’s global presence and provide a stable market for its products. As William Dawes, CEO of Mkango Resources Limited, said, "This funding will enable Mkango Resources Limited to maintain momentum on achieving commercial production in the UK and the development of the Germany operation."

The EU’s identification of the Songwe Hill Rare Earth Project as a priority project is a significant development for Malawi’s mining sector. The EU provides a stable and strong market for Malawi’s rare earth projects, and this development is expected to increase the EU’s security of supply of rare earths. As geologist Ignatius Kamwanje said, "With global geopolitical dynamics, western countries are shifting to Africa in terms of supply of raw materials from critical minerals such as rare earth and niobium, whose supply were initially dominated by China and Russia." The EU’s support for the project is a testament to the growing importance of Africa in the global supply chain of critical minerals.

The mining development agreement between Mkango Resources Limited and the Malawi Government provides a framework for the development of the project. The agreement includes a 10 percent shareholding in the firm for the Malawi Government, a 5 percent royalty of gross revenue, a 30 percent corporate tax rate, a 10-year stability period, and a 10-year tax loss carry forward. This agreement is expected to provide a stable and predictable environment for the development of the project, which will boost investor confidence and attract more investment into the sector. As Kamwanje said, "The development will boost investor confidence on the mining project, which already signed a mining development agreement with the Malawi Government in July last year." This is a significant opportunity for ndalama za kukwela (investment) in Malawi’s mining sector, and businesses should take note of the potential for growth and development in this area.

Source Link

What are your thoughts on this business development? Share your insights and remember to follow us on Facebook and Twitter for the latest Malawi business news and opportunities. Visit us daily for comprehensive coverage of Malawi’s business landscape.

Vanessa Banda
Latest posts by Vanessa Banda (see all)
Post Views: 270