Like nimble gazelles, ASX juniors are waltzing into Africa’s virgin territory for critical minerals
Is everyone forgetting how cheap it is to mine critical minerals in Africa?
Maybe? Or maybe not.
A quick scrape of the ASX will tell you there are quite a few early movers into the world’s Garden of Eden, proving up mineral wealth in vastly underexplored jurisdictions with little to no previous mining nous for rare, in-demand commodities.
Like nimble gazelles, intrepid ASX-listed mining juniors are leaping into near-virgin mining territory and attracting a helluva lot of attention from a bunch of OEMs, Sovereign Wealth Funds and governments both foreign and domestic.
The big cats are also jumping on board to help explorers cut red tape, provide funding and accelerate the development of minerals projects necessary for our jump into cleaner energy sources.
Let’s take a look-see:
US-Saudi partnership to spend big in Africa
None are more publicly stating their plans to foray into Africa than the Saudis and US – announcing a partnership late last year to invest US$15 billion into the continent to secure critical minerals supply.
Saudi investment minister Khalid Al-Falih has publicly announced the nation would use its sovereign wealth fund to make “game-changing investments” into Africa.
“Saudi Arabia has shown they are willing to deploy the capital at a time when many private sector players are scaling back on investment,” Baskaran said.
“It has also shown that is willing to provide African countries with the support to ensure they get more from their resources.
“By partnering, Saudi offers the US and its allies the most powerful counter to China’s dominance in critical minerals.
“The US has had very limited commercial engagement with the African continent, which has over 75% of the world’s manganese, platinum and chromium, nearly half the world’s cobalt, and a fifth of the world’s graphite.
“On the other hand, Saudi Arabia has become increasingly close to Africa.”
The Carnegie Institute says the African Union is well aware of its mineral endowment and countries such as Ghana, DRC, Namibia, Nigeria, Tanzania, Mali, Mozambique, Malawi and Zimbabwe, among others, all have such country-level strategies to leverage their deposits.
Africa is primed for a critical minerals surge
Speaking with *, Matthew Johnson, partner at global resources specialist law firm Allen & Overy, says the opportunities for mining projects are greatly increasing on the continent.
“What we’re seeing is that companies will go wherever the opportunities are,” Johnson says.
“Our sense of this is that they are willing to take on board perceived geopolitical risks over the potential time delays to get projects off the ground in other jurisdictions such as WA and Canada.
“Part of the attraction of places like Africa – and we’re even seeing it in South America – is the speed of being able to get projects permitted from start to finish much quicker.
“From what we see, they’re still undertaking all of the right environmental impact assessments in much the same way, but there’s also that willingness across the board to process these things quicker than it might be in other, more robust jurisdictions.”
Johnson also says that while new tech looks promising, they may take years – if not decades – to become mainstream, so it’s critical for companies and governments alike to meet their current, long lead project timelines and clean energy targets using commercially proven end products.
“We’re increasingly seeing OEMs coming in from electronics and automotive companies that are willing to get involved in trickier to operate jurisdictions due to the scarcity of supply and tight timetables for getting products to market,” he says.
“Government EV targets are definitely driving pressure for OEMs to secure supply chains and we don’t see that letting up any time soon.”
The ASX gazelles leaping to the occasion
Leo Lithium, meanwhile, has come out of the fog from the stalled development of its Goulamina lithium project in Mali where its backer, Chinese battery maker Ganfeng, has floated its progress – another example of an OEM willing to get projects into production at all costs.
Nearby is First Lithium’s Blakala lithium prospect; which, according to CSA Global, is one of the only other Tier 1 critical minerals projects in the country.
FL1 is hard at it unlocking Blakala’s potential, with the latest hits from diamond drilling showing a whopping 111m @1.57% Li2O from 33m and up to 1.94% from wide spodumene targets west of the main target area.
Backed by Piedmont Lithium (which will take a 50% stake in the project) Atlantic Lithium aims to become Ghana’s first lithium producer as it advances its 35.3Mt @ 1.25% 350,000tpa Li2O Ewoyaa project.
Staying in West Africa, Mako Gold just completed a program of detailed geological mapping and rock chip sampling that has turned up several multi-kilometre manganese-rich zones at its Korhogo project in Côte d’Ivoire.
According to its MD Peter Ledwidge, the results achieved from this low-cost mapping and rock chip sampling program add to the potentially significant discovery already made on the company’s Ouangolodougou permit at Korhogo.
On to rare earths and Ionic Rare Earths is looking to be Uganda’s – and Africa’s – first ionic adsorption, clay-hosted REE project to get off the ground.
The explorer owns 60% of the Makuutu project which has a current (and massive) resource of 532Mt @ 640 parts per million (ppm) total rare earths oxide (TREO) containing 71% magnet and heavy rare earth carbonate (MREC) which contain high value neodymium and praseodymium (NdPr).
Tanzania is not well known for REEs, yet Peak Resources is pursuing the high-grade Ngualla project, where recent trench samples confirmed widespread high-grade fluorspar mineralisation across a ~3.7km Breccia zone, which is known to contain high-value percentages of NdPr oxides.
And, as graphite stocks are on the move due to Chinese supply fears, Evolution Energy is progressing its Chilalo graphite project also in Tanzania and it couldn’t be better timing.
Then there’s Rio Tinto backed Sovereign Metals, which is basically nailed on to get into production of its world-scale Kasiya rutile/graphite project in Malawi.
With support not only from one of the world’s largest miners, it also has the backing of the Malawian government.
It’s no stranger to success in the country – PSC had great success with its 72.7Mt Arcadia project, subsequently selling it to China’s Huayou Cobalt in mid2022 for ~US$422m cash – and the explorer reckons Step Aside could be within the same mineralised system.
Food for thought on the Road to Mining Makuutu my friends
Cheers
Frank
IXR Price at posting:
1.7¢ Sentiment: Buy Disclosure: Held
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