Canada’s Mkango Resources (TSX, LON:MKA), one of the very few rare earth producers outside China, plans to start mining from its Songwe Hill mine in Malawi within three years, chief executive William Dawes said Monday.
The company, which has been present in the south-eastern African country for more than a decade, says that by 2021 will be producing 3,000 tonnes of rare earths per year. The figure includes 1,000 tonnes of praesodymium, neodymium, dysprosium and terbium, which are expected to become essential for the manufacturing of batteries, magnets and electric vehicles, Reuters reports.
Shares in the company shot up after the news and were trading more than 11% higher in Toronto at 1:37PM ET. So far this year, however, they are down about 16.6%.
Demand for rare earth is expected to boom from 2020 onwards as growth rates of top end-use categories including electric vehicles, wind turbines and other hi-tech applications accelerate.
According to a recent report by Adamas Intelligence, a rare metal research firm, the REE market is quickly returning to strong global demand growth for a number of rare earth elements including neodymium, praseodymium, dysprosium, and lanthanum, many of them present in Mkango’s Mali mine.
The resulting rise in price will help “sustain the profitability and growth of today’s dominant producers, and incentivize continued investment in exploration and resource development globally,”Adamas predicts.
The Calgary-based company says its Songwe Hill project is particularly rich in the rare-earth oxides (REO) neodymium, praseodymium, dysprosium and terbium, which account for about 80% of the value in bench-scale test work concentrates produced from the site’s samples.
The firm is also working on a uranium project in the same country — Thambani. Exploration at the site is focused on the radioactive metal and associated tantalum and niobium. However, Mkango is also evaluating the asset’s lithium potential.