Lindian Resources Signs Iluka Offtake Deal to Advance Kangankunde Development

Lindian Resources (ASX: LIN) has executed a binding offtake agreement and term loan facility with Iluka Resources (ASX: ILU), establishing a cornerstone strategic partnership for the development of the Kangankunde rare earths project in Malawi.

The agreement includes a US$20 million (A$32 million) construction term loan and a 15-year offtake for high-grade monazite concentrate, with provisions for significant expansion under a Phase 2 development.

The remainder of Lindian’s June quarter update outlined further construction milestones, growing institutional interest in project financing, and a strengthened execution team on the ground in Malawi.

Iluka Partnership Secures Long-Term Sales Pathway

Under the binding agreement, Iluka will purchase 6,000 tonnes per annum of monazite concentrate over 15 years, totalling 90,000 tonnes and containing 9,600t of neodymium and praseodymium.

The concentrate will feed Iluka’s Eneabba refinery in Western Australia, part-funded by the Australian Government and expected to commence commissioning in 2027.

Iluka also has right of first refusal over any Kangankunde production offered on more favourable terms to third parties, as well as over a potential Phase 2 expansion of up to 25,000tpa if it funds half the development cost.

Loan Facility Enhances Project Certainty

The US$20m secured loan facility is structured over five years, with interest capitalised during construction and no financial covenants imposed.

Lindian retains flexibility to prepay the loan without penalty and will not issue any options or royalties in connection with the funding arrangement.

Pricing mechanisms in the offtake deal are linked to realised Eneabba prices for NdPr oxides, with a payability structure that offers downside protection and upside exposure—including any government-backed price support.

Kangankunde Construction Ahead of Schedule

Construction at Kangankunde accelerated through the June quarter, with access and haul roads advancing rapidly under the direction of Lindian’s European contractor, Mota Engil.

The company brought key infrastructure to or near completion, including a solar power facility and perimeter security measures, supporting contractor activity and site readiness.

Design refinements from the optimised feasibility study prompted updated pricing from shortlisted contractors, with major awards scheduled for the second half of 2025.

Project Momentum Underpinned by Global Attention

A site visit by officials from the Ministry of Mining, International Monetary Fund and United Nations Development Programme during the quarter highlighted the project’s significance as a generator of foreign exchange and governance best-practice.

Meanwhile, strategic engagement continued with major institutional stakeholders, including meetings held during global industry conferences in Washington DC and Montreal.

Test work also commenced with ANSTO to produce mixed rare earth carbonate using both sulphuric acid and caustic cracking methods, further supporting offtake discussions.

High-Quality Concentrate Draws Market Interest

Lindian’s Kangankunde monazite product contains 55% total rare earth oxides, with 19.35% NdPr content and extremely low levels of uranium and thorium, allowing it to meet international transport and processing standards.

The concentrate works with both sulphuric acid and caustic conversion, with low iron content reducing reagent needs and supporting a more sustainable flowsheet.

These attributes have drawn interest from multiple parties and helped position Lindian to negotiate favourable funding and offtake arrangements.

Quarter-End Position and Corporate Developments

Lindian ended the June quarter with $3.49 million in cash following $1.2m raised from option exercises and a $449,000 research and development tax refund.

The company also secured 100% ownership of its Lelouma bauxite project in Guinea, consolidating its control over a globally significant 900Mt resource.

Key appointments during the quarter strengthened Lindian’s project execution capabilities as it prepares for full-scale development.