UK-Australian mining company Rio Tinto has opted out of its right to become the operator of Sovereign Metals' Kasiya Rutile-Graphite project in Kasiya, Malawi, Sovereign announced today.
Rio Tinto's rights according to a previous agreement, including exclusive marketing rights to 40pc of Kasiya's annual production and rights over any offer from a third party, have lapsed. The company remains a shareholder in the project.
Rio Tinto's decision does not reflect any change in the fundamentals of the project as a strategic, non-Chinese source of graphite, Sovereign said, adding that it will now pursue a US-focused strategy. The company said is in talks with trading companies Mitsui and Traxys, among others, for binding agreements regarding the offtake from Kasiya, it said.
Sovereign in April released a definitive feasibility study (DFS) on Kasiya, proposing production of 275,000 t/yr of 96pc flake graphite and 222,000 t/yr of 95pc rutile for a 25 year life-of-mine. The company estimated total capital expenditure of $727mn to first production, but gave no indication of when that will be.
"Since 2023, Rio Tinto has invested over A$60mn in the project and has provided valuable technical input... [which] has contributed to the successful delivery of the unique pilot mining and rehabilitation programme," Sovereign Metals chairman Ben Stoikovich said. "Sovereign looks forward to Rio Tinto continuing as a supportive shareholder as it builds on this important period of technical and operational progress."
