Lindian Resources, a rare earths explorer focused on its Kangankunde project in Malawi, is navigating scrutiny over its mining licence status following recent parliamentary discussions. At the Diggers and Dealers conference in Kalgoorlie, Chief Financial Officer Derek Bideshi expressed unwavering confidence in the project. However, a circulating Facebook video from Malawi’s parliament showed Speaker Sameer Suleman urging the government to suspend Lindian’s operations over concerns it holds a medium-scale licence rather than a larger one.
Speaker Suleman questioned why a larger licence was not being used, granting a committee 30 days to verify the situation, with the implication that the mine could be closed if issues were found. This development prompted a 10 per cent dip in Lindian’s shares when the Australian share market opened on Wednesday, before the stock was placed in a trading halt. The situation raises concerns for prominent Australian hedge funds, including Regal Partners and L1 Capital, who are among the largest shareholders.
Lindian referenced “media speculation” in an ASX statement but did not directly address the Malawian parliamentary hearing comments. Wilson Asset Management’s portfolio manager, Shaun Weick, whose Active Fund holds a substantial position in Lindian, conveyed confidence in the project’s continued government support, dismissing the parliamentary actions as politically motivated. Weick acknowledged the potential transition from a medium to a large-scale licence, which would entail a minor royalty increase, but stated this was anticipated by investors, with no expected changes to the production timeline towards October. Shareholders also expressed confidence in a swift resolution.
The Kangankunde project remains a crucial asset for investors seeking rare earth exposure outside China, valued for its low extraction costs, limited radioactivity, and nearing production. Morgan Stanley has even tipped Lindian for inclusion in the S&P/ASX 200 Index, potentially attracting further passive investment.
