Malawi’s Songwe Hill rare earth project has seen its initial capital cost rise to US$297.8 million, up from a previous estimate of US$277 million, according to a definitive feasibility study released by Mkango Resources.
The revised estimate reflects updated project parameters as the company moves to position Songwe Hill as a strategic source of critical minerals used in the global energy transition. Despite the higher upfront cost, the project is still expected to deliver strong returns, with a projected payback period of 3.4 years from the start of full production.
Songwe Hill is designed as an 18-year mining operation, with average annual output estimated at 5,954 tonnes of rare earth oxides during its first five years. The concentrate will include key elements such as neodymium, praseodymium, dysprosium and terbium all essential for manufacturing permanent magnets used in electric vehicles and wind turbines.
The project forms a central part of Mkango’s broader strategy to build an integrated rare earth supply chain. Output from Songwe Hill is expected to feed into a planned refining facility in Puławy, Poland, allowing the company to move further up the value chain.
However, financing for the project has yet to be finalised. Mkango is seeking to attract international investors, particularly from the United States, where demand for alternative sources of critical minerals has been rising amid efforts to reduce reliance on China.
The company has already secured support from the U.S. International Development Finance Corporation, which has provided initial funding and is considering a loan of up to $100 million. Interest has also come from the European Union, reflecting growing Western focus on securing stable supply chains for strategic resources.
As part of its funding strategy, Mkango plans to combine the Songwe Hill project with its Polish refining operations into a new entity through a merger with Crown PropTech Acquisitions. The transaction is expected to culminate in a listing on the Nasdaq, aimed at increasing exposure to U.S. investors and unlocking additional capital.
The push comes amid intensifying global competition for rare earth materials, which are critical for clean energy technologies and advanced manufacturing. Western economies, including the United States, the European Union and Japan, are seeking to diversify supply chains away from China, which currently dominates global production and processing.
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In this context, Songwe Hill is seen as a potentially significant new source of supply. However, the project still faces key uncertainties, including securing full financing and establishing a clear timeline for production. Analysts say its success will depend on execution, market conditions and continued investor appetite for critical minerals projects.
