IFC is the private lending arm of the World Bank Group. The consortium would also include Appian Natural Resources Fund LP a private equity fund that has been established to invest specifically in the metals and mining sector.
This is according to an announcement by Peak Resources Limited posted on its website on October 29, 2014.
The Ngualla rare earth project is to be undertaken along Mount Ngualla, a collapsed volcano located in the remote south west of Tanzania.
The project which is in Chunya District, Mbeya, South-West Tanzania is currently managed by Peak Resources Ltd, Australia.
The Ngualla rare earth element deposits in Tanzania are a recent discovery and are the highest grade of the large undeveloped rare earth deposits.
Ngualla gained widespread attention in 2010 after it was first reported to contain quantities of rare earths oxides.
In 2012 it was announced that Ngualla contains one of the largest rare earth element deposits outside of China.
The area is also prospective for phosphate, tantalum and niobium that have also been found in commercial quantities.
The potential investment would represent IFC’s first within the rare earth space and is a strong endorsement of the technical advantages along with the socioeconomic benefits of the Ngualla Project.
The investment has been approved by IFC’s investment committee but is subject to the successful completion of IFC’s mandatory 30-day disclosure period and formal approval by IFC’s Board.
Peak’s Managing Director, Darren Townsend said, “following the introduction by Appian of IFC, we are very pleased to have attracted an organization of the standing and reputation of IFC as part of the consortium with Appian in the $25million funding package.”
The agreement with Appian is subject to final documentation and receipt of regulatory approvals and contemplates a staged investment anticipated to fully fund the Company through the Bankable Feasibility Study for the Ngualla Rare Earth Project.
The transaction remains on track for closing by November 30, 2014.
Following the introduction by Appian, IFC have completed a thorough due diligence on Peak and the Ngualla Project.
IFC are, subject to the successful completion of IFC’s mandatory 30-day disclosure period and approval by IFC’s Board, proposing to participate as a consortium partner with Appian in the investment.
According to Peak Resources in 2012, the estimated global demand for rare earths was 120,000-130,000 tones REO (Rare Earth Oxide) and the global market value was $3-5 billion..
Global demand for rare earths is predicted to increase to 160,000 tones in 2016 and between 200,000-240,000 tones in 2020.
The global rare earth market is dominated by China. It is estimated that China controls 85 per cent of the global supply of rare earths and represents 65 per cent of the global demand.
The preliminary feasibility study estimated a capital cost of $282 million for the project, which would operate for 58 years, delivering 10,000 t/y of rare earths with room for expansion.
IFC is the largest source of loan and equity financing for the emerging markets private sector.
East African Business Week
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