Lindian Resources’ chief financial officer, Derek Bideshi, expressed unwavering confidence in the company’s flagship Kangankunde rare earths project in Malawi at the recent Diggers and Dealers conference. Lindian Resources is a mining company focused on developing its key rare earths asset, aiming to establish Malawi as a trusted mining jurisdiction. However, an entirely different narrative emerged as a video circulated showing Malawi’s National Assembly Speaker, Sameer Suleman, urging the government to suspend Lindian’s operations. Mr Suleman questioned the company’s use of a medium-scale mining licence, suggesting it might be avoiding larger licence obligations and giving authorities 30 days to verify compliance.
Should such a suspension occur, it would significantly impact a number of prominent Australian hedge funds, including Regal Partners and L1 Capital, who are major shareholders in Lindian, a stock that has surged over 400 per cent in the past year. The company’s shares plunged 10 per cent on the Australian sharemarket on Wednesday before entering a trading halt. Lindian mentioned media speculation in an ASX statement but made no direct reference to the Malawian parliamentary hearing. The issue also comes as Morgan Stanley has tipped Lindian to enter the S&P/ASX 300 Index, potentially attracting substantial new passive investment.
The licensing query was initially raised in May by Malawian news outlet The Nyasa Times, which reported that the mining regulator would review the appropriateness of Kangankunde’s mid-scale status. While the project initially met the medium-scale definition, Lindian’s ambitious plans and market expectations suggest an upgrade to a large-scale project is warranted. Such a change would entail stronger obligations, including government equity participation, formal community development agreements, and stricter reporting requirements. Shaun Weick, portfolio manager for Wilson Asset Management’s Active Fund, expressed confidence in the project’s continued government support, characterising the parliamentary concerns as politically motivated from a small sector without authority to effect change. Mr Weick acknowledged the potential move to a large-scale licence would trigger a slight royalty increase, already anticipated by investors, and affirmed the October production timeline remains “full steam ahead”.
