Pan-African lender Absa Bank, through its Corporate and Investment Banking division, has conditionally approved a credit term sheet for a 50% participation in a $160-million syndicated loan facility for London-listed Pensana’s Longonjo rare earths project in Angola.
The approval is subject to the conclusion of definitive loan documentation, fulfilment of specified conditions, and obtaining political and commercial risk insurance from a reputable insurer for Absa’s exposure under the facility.
The loan will provide senior funding for Phase 1 development of the Longonjo mine through Pensana’s 84%-owned subsidiary, Ozango Minerais.
Approximately 60% of the project funding will be covered by debt financing, with the remaining 40% to be provided as equity by Ozango.
Pensana Chairperson Paul Atherley emphasized the importance of this milestone in securing funding for the Longonjo project.
He noted the project’s potential to positively impact the local community by creating over 600 high-value jobs, with more than 50% allocated to young people.
Upon reaching full production, the Longonjo project is expected to generate around 2,400 direct and indirect jobs while producing approximately 5% of the world’s magnet metal rare earths, essential for wind turbines and electric vehicles.
The term sheet approval follows the successful completion of detailed technical, marketing, environmental, and fiscal due diligence.
Absa’s credit committee has conditionally approved the loan, with the legal due diligence process nearing completion.
Pensana has invested over $70 million in exploration, technical studies, and environmental assessments for Longonjo over the past six years.
The total cost to bring the project into full production is estimated at $325 million, with operating expenditures over its 20-year mine life projected at $2.3 billion.
