Pensana Rare Earths (ASX: PM8) has received Angola government approval to begin operations at the Longonjo rare earths project, which will supply magnet elements neodymium and praseodymium.
Angolan President João Lourenço has approved a mining title for Pensana subsidiary Ozango Minerals, with the title being renewable for up to 35 years.
Pensana describes the Longonjo project in the Huambo region as ranking as “one of the world’s largest and highest grade neodymium-praseodymium deposits”.
Consultants SRK reported an inferred resource containing 3.85 million tonnes of rare earth oxides (REO), including 840,000t of neodymium-praseodymium.
Neodymium-praseodymium comprise about 30% of the neodymium-iron-boron super strength magnets.
The mine project is located 4km from the US$1.8 billion (A$2.8 billion) Chinese-built rail line that runs from the border of the Democratic Republic of Congo to the Angolan port of Lobito. Longonjo is 315km from the port.
Terms include two-year tax holiday
Pensana will pay the Angolan government a 2% royalty on revenue.
There will be a two-year tax holiday, after which the company will pay a 20% tax and 5% municipal tax on revenues.
In return, Pensana will get an exemption from customs duties on all imported equipment, a full five-year capital repayment allowance, and a dividend tax exemption for three years.
Angola’s mineral resources, oil and gas minister Diamantino Azevedo said the approval of the mining contract reflects the government’s strong support for foreign investment.
It will be one of the largest investments in regional Angola in recent years.
Pensana managing director Tim George described the government’s approval as a major milestone.
“The support of the ministry in expediting the contract is very much acknowledged and is a testament to Angola being ‘open for business’ — even during the COVID-19 lockdown,” he said.
The investment in the company by Angola’s sovereign wealth fund underscored the government’s commitment to the project, Mr George added.
Further drill results expected to extend mine life
Earlier this month, Pensana reported further “high grade” drill results.
They included one hole which intercepted two zones of mineralisation — 8m at 4.94% REO (including 1.05% neodymium-praseodymium) and 12m at 4.16% REO (including 0.79% neodymium-praseodymium).
These drill results are expected to help extend the life of the mine.
Pensana executive director Dave Hammond noted at the time that the intersections demonstrated the continuity of large areas of inferred resources outside the pit design.
Two days later, the company announced it had appointed German investment bank Deutsche Gesellschaft fur Wertpapieranalyse as its European investor relations adviser.