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Rio Tinto (ASX, LON: RIO) is investing A$18.5 million ($12.4m) to increase its stake in Australia’s Sovereign Metals (ASX: SVM) (LON: SVML), which is advancing the Kasiya rutile-graphite project in Malawi.
The move by the world’s second largest miner will boost its shareholding in Sovereign to 19.76%, as it continues to raise its exposure to battery minerals.
The investment builds on a previous deal one year ago, when Rio Tinto spent A$40.4 million ($27m) to take an initial 15% interest in the owner of the world’s largest rutile and second largest flake graphite deposit.
The Kasiya orebody contains 1.8 billion tonnes at 1% rutile and 1.4% graphite, resulting in 17.9 million tonnes of contained natural rutile and 24.4 million tonnes of contained graphite.
Rio Tinto’s further investment represents another significant step towards unlocking a major new supply of low-carbon footprint natural critical minerals, the miners said in the statement.
Sovereign managing director Frank Eagar said the company has made significant progress in advancing Kasiya over the last year, thanks to Rio’s involvement. This includes the successful launch of a pilot phase in May.
Rio not only is one of Sovereign’s top shareholders, but also offers the Australian junior support and guidance on the technical and marketing aspects of the Kasiya project through a joint committee set up by the two companies.
The mining giant already produces titanium dioxide from rutile at its operations in Madagascar, South Africa and Canada. Titanium is used in solar panels, paint and aircraft because of its ability to withstand temperature extremes.
