US backs Altona’s Mozambique rare earths project

Shares in Altona Rare Earths (LSE: REE) soared after the company said the United States’ government confirmed its intention to support development of its Monte Muambe joint venture project in Mozambique.

The backing from the U.S. Trade & Development Agency (USTDA) aims to define technical and financial pathways to develop Monte Muambe, Altona reported Monday, though the announcement didn’t specify any funding. Monte Muambe hosts the light rare earths neodymium and praseodymium used in high-strength permanent magnets, defence applications and energy transition technologies. 

“This commitment of support from USTDA is a powerful external validation of the Monte Muambe project’s strategic quality and economic potential,” CEO Cedric Simonet said in a release. “This partnership is a clear endorsement of our progress in Mozambique, reinforces our shared objective to advance a project of growing strategic relevance, and highlights the role Monte Muambe can play in building more resilient global supply chains for both rare earths and fluorspar.”

US rare earths support

The USTDA support comes as the U.S. government is increasing its backing of rare earths projects in the U.S. as well as internationally. Just last week, the U.S. International Development Finance Corporation (DFC) added a $100-million top up to the $465 million already agreed with private Brazilian rare earths miner Serra Verde to support its Pela Ema project, Latin America’s only producing rare earths mine.

The DFC also backed Aclara Resources (TSX: ARA) with up to $5 million for its Carina rare earths project in Brazil, and the U.S. Export-Import Bank said in June that Critical Metals (Nasdaq: CRML) qualifies to apply for a $120-million loan in support of its Tanbreez project in Greenland.

The Altona stock gained more than 76% at 2.29 pence by mid-afternoon in London, lifting the explorer’s market capitalization to £4.25 million ($5.8 million).  

The support confirmation was provided by Mr. Thomas Hardy, USTDA’s Deputy Director and Chief Operating Officer on Sunday during his address at the High-Level Engagement on U.S. Support for Critical Mining Projects in Sub-Saharan Africa meeting in Cape Town.

Multi critical minerals

Monte Muambe hosts 8 million indicated tonnes grading 2.38% total rare earth oxides (TREO) for 191,000 tonnes of contained TREO, and 5.6 million inferred tonnes at 2.47% TREO for 137,000 tonnes TREO, according to a JORC-compliant initial resource from 2023. It also also hosts gallium and fluorspar, a mineral used in industrial and chemical processes.

The company expects assay results soon from a recent fluorspar and gallium drilling campaign and said the resulting resource estimate should demonstrate that the fluorspar component represents a viable standalone mining project.

Altona holds a 51% interest in Monte Muambe, with local company Muambe Mining Limitada holding the remaining interest. Altona’s share is to rise to 70% once it completes the pre-feasibility study. It also holds a 25-year mining licence that runs through at least 2049.