Mkango updates feasibility studies for Songwe Hill, Poland plant

19th Mar 2026 09:21

(Sharecast News) - Mkango Resources reported updated feasibility study results for its Songwe Hill rare earths project in Malawi and a pre-feasibility study for a proposed separation plant in Poland on Thursday, highlighting strong project economics and positioning the group to benefit from growing demand for critical minerals.

The AIM-traded company said the Songwe project was expected to deliver a post-tax net present value of $339.5m at a 10% discount rate, with an internal rate of return of 24.3% and a payback period of 3.4 years from the start of full production.

Life-of-mine post-tax cash flow is estimated at $1.55 billion over an 18-year operating life. Initial capital expenditure for the Malawi-based project is forecast at $325.5m, including contingency.

The proposed Puławy rare earth separation plant in Poland demonstrated stronger headline economics, with a post-tax net present value of $779m, an internal rate of return of 40% and a payback period of 2.12 years.

Life-of-operations post-tax cash flow is projected at $4.95bn, with initial capex estimated at $212m.

Mkango said both projects benefitted from exposure to key rare earth elements including neodymium, praseodymium, dysprosium and terbium, which are critical for permanent magnets used in electric vehicles, wind turbines and electronics.

"We are delighted to announce the results of our updated NI 43-101 DFS for the Songwe Hill Rare Earths project and the PFS results for the Puławy Rare Earth Separation Plant," said president Alexander Lemon.

"Incorporating revised rare earth pricing, capital and operating cost assumptions, these studies reflect our commitment to moving these high-quality projects forward."

He added that the company was "uniquely positioned as a future supplier of both mined and recycled rare earths - a critical differentiator as global demand for green transition materials accelerates," describing Songwe and Puławy as "landmark projects for the communities and economies they are expected to transform."

Under the updated study assumptions, Songwe is expected to produce an average of 5,954 tonnes per year of total rare earth oxides during its first five years of operation, including 1,953 tonnes of neodymium and praseodymium oxides.

The project had a defined mineral reserve of 18.1m tonnes at a grade of 1.16% total rare earth oxides.

The feasibility study was based on a conventional open-pit mining operation with on-site processing facilities producing a purified mixed rare earth carbonate, which is intended to be exported for further processing at the proposed Puławy plant.

The Malawi project had secured key permitting milestones, including a mining development agreement and a completed environmental and social impact assessment aligned with international standards, and had been designated a strategic project under the European Union's Critical Raw Materials Act.

The Puławy plant was expected to process the Malawi-produced concentrate, with the pre-feasibility study indicating separation costs of around $2.14 per kilogram of rare earth oxides.

Mkango noted that project economics could improve further under more bullish pricing scenarios, with Songwe's net present value rising to approximately $489m and the Puławy project to around $892m, alongside higher internal rates of return.

The firm said the updated studies reflected revised assumptions on pricing, costs and market demand, and form part of its strategy to advance an integrated mine-to-separation rare earths supply chain spanning Africa and Europe.

At 0951 GMT, shares in Mkango Resources were down 1.29% at 45.9p.

Reporting by Josh White for Sharecast.com.

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