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- Up to 500,000 litres of diesel secured at a fixed price.
- Agreement timetable covers project construction and commissioning.
- Fuel supply secured with established Malawian operator.
Lindian Resources (ASX:LIN) is powering up its Kangankunde rare earths project in Malawi with the signing of a 12-month fixed-price diesel supply agreement. The fixed-price supply agreement with leading local fuel supplier Petroda Malawi is for up to 500,000 litres of diesel at US$2.83 per litre.
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The company’s executive director, Zac Komur, told shareholders the deal will be removing fuel price exposure through construction and commissioning, further strengthening the project’s low-cost, execution-ready profile.
The volume will be provided in two tranches of 250K litres, with the first tranche delivered to site as required, ensuring availability without on-site storage constraints.
“This agreement removes a key input cost risk during construction and mining start-up and reinforces Kangankunde’s structural cost advantage. Locking in fuel pricing ahead of volatility provides certainty as we move toward first production and reflects the team’s disciplined approach to cost control and execution,” Mr Komur said.
He noted that the recent volatility in fuel markets and global interest rates has introduced uncertainty across the resources sector.
“Lindian has proactively mitigated both risks at Kangankunde. The fixed-price, prepaid fuel arrangement provides full cost certainty for the next 12 months and removes exposure to further MERA price revisions. Combined with approximately two months of existing on-site inventory, Lindian has secured uninterrupted fuel coverage through construction, mining start-up and commissioning.”
Kangankunde has a modest power requirement of approximately three MW, fully supported by existing grid infrastructure, the company also pointed out.
The project is connected to ESCOM’s network, drawing on Malawi’s hydropower base and supported by the Mozambique interconnector, providing stable and reliable power supply without the need for dedicated on-site generation.
“The completion of the $100M institutional placement in April will allow Lindian to move into stage one mining and processing debt-free, will allow the company to advance multiple workstreams of our stage two development and to finalise the purchase and start of our SARECO cracking facility in Kazakhstan.
“The oversubscribed placement provides a clear, debt-free pathway to first production and cash flows, insulating the Project from global geopolitical tensions and volatility.”
Mr Komur said construction at Kangankunde remains on schedule.
LIN is steady at 94.5¢. Mkt cap $1.727B.
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