The Longonjo rare earths project in Angola has received all necessary approvals for full financing, amounting to approximately US$268 million, Pensana (LSE:PRE) said in an update on Tuesday (March 18).

Pensana holds an 84 percent stake in its Angolan subsidiary Ozango Minerals, the owner of Longonjo.

The money will be used to fund Phase 1 work at the project, with 60 percent coming from a US$160 million loan facility announced in late January. The Africa Finance Corporation's (AFC) board has now approved the finance institution's US$81.2 million participation in the facility, with the remainder coming from South Africa's Absa Bank.

There is also a US$15 million bridging loan from the Angolan Sovereign Wealth Fund (FSDEA), a US$54.9 million convertible loan approved by the AFC and US$38 million from the FSDEA made up of equity and a convertible loan.

Longonjo will concentrate and refine rare earths on site, producing a mixed rare earth carbonate product.

The FSDEA said its investment in Longonjo aligns with its commitment to advancing the national mining sector.

“Beyond its substantial economic impact — such as job creation and tax revenues — the project plays a crucial role in establishing in Angola a key segment of the value chain for an industry essential to the global energy transition,” FSDEA Chair Armando Manuel commented, emphasizing the mining industry's role in economic diversification.

For its part, the AFC noted that this investment reflects its commitment to unlocking Africa’s mineral potential through local value addition, industrial growth and responsible mining.

“With approximately one-third of the world’s rare earth mineral reserves, Africa is poised to become a cornerstone of the global clean energy revolution," AFC President and CEO Samaila Zubairu said.

"By investing in Africa’s rare earth sector, we are not only accelerating regional development but also strengthening global energy security in line with the aspirations of the Mineral Security Partnership."

Commentary released by Brookings in 2022 looks at the current state of the rare earths sector in Africa, evaluating whether the continent could replace China as the world’s supplier of rare earths.

The report suggests that Africa’s potential is untapped given the low levels of exploration.

It outlines several rare earths assets, including the Songwe Hill project in Malawi, which is owned by Canadian company Mkango Resources (TSXV:MKA). It is expected to commence mining this year.

Longonjo is mentioned in the study as a significant rare earths deposit.

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Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.