Australia-based Sovereign Metals said that stage 1 of the Kasiya rutile-graphite project located in Malawi will require $597m in capital cost (capex) to first production, based on the findings of a pre-feasibility study (PFS).
Located in the central part of the East African country, the Kasiya project is estimated to commence operation with an operational throughput of 12 millions of tonnes per annum (Mtpa). This will be expanded subsequently to 24Mtpa, which will mark stage 2 of the project.
Stage 2 of the Malawi rutile-graphite project is estimated to entail a capex of $287m.
At full-scale operation, the Kasiya project will produce about 245kt of natural rutile and 288kt of natural graphite each year.
Sovereign Metals managing director Julian Stephens said: “The high-quality of work completed and the results of the PFS demonstrates that Kasiya is a globally significant project that has the potential to deliver a valuable long-term source of low-CO2 products and generate substantial economic returns with a forecast average EBITDA of US$415 Million per annum for the initial 25 years modelled.”
According to the PFS, the Kasiya rutile-graphite project is positioned to become the largest rutile producer in the world at 222kt per annum for an initial life-of-mine (LOM) of 25 years.
Sovereign Metals said that it is advancing into an optimisation phase before moving forward with the definitive feasibility study (DFS).
The PFS estimates a post-tax net present value (NPV) of $1.6bn for the Malawian rutile-graphite project.
It also projects a post-tax internal rate of return (IRR) of 28% for the Kasiya rutile-graphite project with an after-tax payback period of 4.3 years.
In July 2023, Rio Tinto agreed to acquire 15% stake in Sovereign Metals for A$40.4m.
