Anglo-Australian multinational company Rio Tinto has announced its investment of A$40.4 million in the mining firm Sovereign Metals Limited. This investment will allow Rio Tinto to acquire a 15% stake in Sovereign and provide the necessary funding to advance the Kasiya Rutile-Graphite Project in Malawi.
In a press release, Ben Stoikovich, Chairman of Sovereign, described the agreement with Rio Tinto as a landmark one, highlighting the potential for Kasiya to become a globally significant supplier of two critical minerals and contribute to supply chain decarbonization and achieving net-zero.
Sovereign will utilize the capital raised from the deal to finance the progression of a definitive feasibility study of the project, as well as the development, marketing and monetization of rutile and flake graphite deposits at the mine.
As part of the agreement, Rio Tinto has an option to increase its stake in Sovereign to 19.99% within 12 months. Moreover, they could potentially become the operator of Kasiya and have the right to market 40% of the mine’s total annual produce to various industries, including the titanium pigment, titanium metal, and lithium-ion battery sectors.
The Kasiya Rutile-Graphite Project, located in central Malawi, is regarded as one of the world’s largest natural rutile and flake graphite deposits. According to a study conducted by Sovereign, the project holds the potential for development at a lower cost and carbon footprint compared to other similar ventures.
