Anglo-Australian multinational company Rio Tinto will invest A$40.4 million in mining firm Sovereign Metals Limited.
The investment will enable Rio Tinto to own a 15% stake in Sovereign as well as contribute funding required to advance the Kasiya Rutile-Graphite Project in Malawi.
“This is a landmark agreement with Rio Tinto. The experience and expertise that Rio Tinto brings will truly set Kasiya apart as a potentially globally significant supply of two critical minerals and take us all a step closer to supply chain decarbonization and achieving net-zero,” Ben Stoikovich, Chairman of Sovereign stated in a press release.
Sovereign will use the capital raised from the deal to fund 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.
Rio Tinto has an option to increase its stake in Sovereign to 19.99% within 12 months, become the operator of Kasiya and market 40% of the mine’s total annual produce to the titanium pigment, titanium metal and lithium-ion battery industries and other sectors as part of the deal.
Located in central Malawi, the Kasiya Rutile-Graphite Project is one of the world’s largest natural rutile and flake graphite deposits with the potential to be developed at a lower cost and carbon footprint compared to other projects, according to a study conducted by Sovereign.
