Pensana seeks funding for Angola rare earth project

Credit: Pensana Rare Earths

Pensana Rare Earths is in early stage talks with lenders including Barclays, South Africa’s Rand Merchant Bank (RMB) and funds including Fidelity to secure more funding for its Angola project, its chairman said on Monday.

Chairman Paul Atherley said the miner planned to raise between $30-$50 million of working capital from the banks while funds would be tapped for about $25 million in equity for the construction of the mine.

State-owned China Great Wall Industry Corporation (CGWIC) will provide the rest of the up to $170 million required to build the rare earths project in Angola, Pensana said.

RMB, Barclays and Fidelity were not immediately available for comment.

Rare earths, a group of 17 minerals used in everything from consumer electronics to military equipment and offshore wind projects, are predominantly mined and processed in China.

Western powers have put the metals on lists of strategic minerals and are trying to develop their own supplies, but analysts say China’s dominance will be very hard to shake.

Talks will pick up pace after Pensana completes its Bankable Feasibility Study expected in October, Chief Financial Officer Rob Kaplan said.

Construction of the project will begin in January, and the working capital will need to be secured towards the end of 2021.

Angola’s government is in the midst of a number of sweeping reforms aimed at diversifying the economy away from oil, gas and diamonds.

The country’s sovereign wealth fund, which is Pensana’s largest shareholder, was at the centre of a scandal involving the former president’s son, Jose Filomeno de Sousa dos Santos, who allegedly transferred $500 million from the bank to a Credit Suisse account in London.

“We are totally transparent and we believe that this new government is a very open book. We will avoid what appears to have occurred before by being open and clear with everybody about what we are doing,” Atherley said.

(By Zandi Shabalala; Editing by Barbara Lewis)

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