A total of $829 million has been raised to explore Africa for metals and minerals over the last two years.
While some 65% of drilling on the continent targets gold, rare earths are the fifth most popular prospect after iron ore, copper and coal attracting five companies spending $42 million during the two years to end-May 2013.
The renewed interest in Africa’s rare earths come despite dramatic falls in the value of the 17 elements used in a variety of high-tech, green and consumer electronics industries.
Most rare earths are down 80% or more from their 2011 peak, when prices were pushed to stratospheric levels by fears over China’s monopoly of global production and the country’s implementation of export controls.
South Africa is poised to become the third country outside China after the US and Australia to start REE production when Great Western Minerals recommissions the Steenkampskraal mine within the next couple of years.
The Financial Times blog beyondbrics reports outside of South Africa, landlocked Malawi appears to show the most promise:
Malawi’s resources are thought to be particularly promising. Will Dawes, chief executive of Canadian company Mkango Resources, believes it could become Africa’s largest rare earth producer. There are at least five potential rare earth mines in Malawi, of which Mkango’s Songwe Hill project is the most advanced. “Malawi ticks the boxes in terms of resource potential, a stable political environment, infrastructure and government support,” says Dawes. He says Malawi’s mining sector is “relatively underdeveloped compared to neighbouring countries” but that with multilateral donor support, Malawi is working to review the mining code and develop more attractive incentives for investors.
Other frontier destinations including Mozambique, Tanzania and Namibia are all vying to attract foreign companies – mainly from Canada and Australia. In Somalia, the sand dunes bordering the Indian Ocean are amongst the areas thought to hold potential for rare earth mining and Turkey, one of its key donors, is showing a keen interest.