July 21, 2020 / 11:06 AM / 20 days ago

Pensana seeks cash from banks, UK funds for Angola project

LONDON (Reuters) - Pensana Rare Earths PRE.L is in early stage talks with lenders including Barclays (BARC.L), South Africa’s Rand Merchant Bank (RMB) and funds including Fidelity to secure more funding for its Angola project, its chairman said on Monday.

Chairman Paul Atherley said the miner planned to raise between $30-$50 million of working capital from the banks while funds would be tapped for about $25 million (19.7 million pounds) in equity for the construction of the mine.

State-owned China Great Wall Industry Corporation (CGWIC) will provide the rest of the up to $170 million required to build the rare earths project in Angola, Pensana said.

RMB, Barclays and Fidelity did not respond to requests for comment.

Rare earths, a group of 17 minerals used in anything from consumer electronics to military equipment and wind generation, are predominantly mined and processed in China.

Western powers have put them on lists of strategic minerals and are trying to develop their own supplies, but analysts say China’s dominance will be hard to shake.

Construction of the Angolan project should begin in January, and the working capital will need to be secured towards the end of 2021, Pensana said.

Angola’s government is in the throes of sweeping reforms to diversify the economy away from oil, gas and diamonds.

The country’s sovereign wealth fund, which is Pensana’s largest shareholder, was at the centre of a scandal involving the former president’s son, Jose Filomeno de Sousa dos Santos, who allegedly transferred $500 million from the bank to a Credit Suisse account in London.

Credit Suisse said documents used in the fraud purporting to be from Credit Suisse were found to be fake.

“There has been no impact regarding Credit Suisse and its clients nor otherwise any related transactional activity or receipt by Credit Suisse of illicit funds,” the bank said.

Pensana’s Atherley said he was confident in the current government.

“We are totally transparent and we believe that this new government is a very open book,” he said.

Reporting by Zandi Shabalala; editing by Barbara Lewis

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