Rio Tinto is set to bite off a 15 per cent stake in Sovereign Metals for $40.4 million.
The investment will be used to advance Sovereign’s Kasiya project in Malawi, unlocking low carbon natural rutile and flake graphite.
Rio will provide Sovereign with technical and marketing advice relating to Kasiya, with a primary focus on spherical purified graphite used for anodes in the lithium-ion battery market.
Rutile, a crystallised form of titanium dioxide, is another big draw for Rio at Kasiya. The major miner is one of the main producers of titanium dioxide in the world, with operations in North America, South Africa, and Madagascar.
Titanium dioxide is highly prized in the renewable energy sphere due to its durability and light weight. It sees use in solar panels and underwater heating pipes, while its light weight also enables planes and vehicles to be more fuel efficient.
Under the Kasiya investment agreement, Rio has the option to increase its shareholding by an additional 4.99 per cent to 19.99 per cent of Sovereign within 12 months.
The agreement also affords Rio the optional right to become the operator of Kasiya on commercial arm’s-length terms. Such a role would give Rio marketing rights to over 40 per cent of all products from the project.
For Sovereign, the investment agreement is an exciting endorsement of Kasiya’s status as a Tier 1 critical minerals project.
“This landmark agreement with Rio Tinto, one of the world’s largest and most accomplished global mining companies, is confirmation of Kasiya’s place as one of the most significant critical mineral discoveries in recent times,” Sovereign chairman Ben Stoikovich said.
“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 decarbonisation and achieving net-zero.
“We look forward to working with Rio Tinto as our strategic partner in the development of Kasiya.”
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