Longonjo Rare Earth Project — Angola's Strategic Mineral Asset

Strategic Significance of Rare Earths

Rare earth elements occupy a singular position in the critical minerals landscape. No other group of minerals combines such extreme supply chain concentration with such irreplaceable technological applications. China controls approximately 60 percent of global rare earth mining and over 90 percent of rare earth processing — the separation, refining, and alloying steps that convert raw ore into the metals, oxides, and magnets used in advanced manufacturing. This processing monopoly gives Beijing effective control over a family of minerals that are essential to electric vehicle motors, wind turbine generators, defence systems, consumer electronics, and medical imaging equipment.

Among the 17 rare earth elements, neodymium (Nd) and praseodymium (Pr) — collectively referred to as NdPr — are the most strategically significant. NdPr forms the basis of neodymium-iron-boron (NdFeB) permanent magnets, the strongest permanent magnets commercially available. These magnets are not merely useful; they are foundational to the energy transition. Every permanent magnet synchronous motor in a modern electric vehicle relies on NdFeB magnets for the conversion of electrical energy into mechanical torque. Every direct-drive offshore wind turbine generator uses NdFeB magnets to convert rotational energy into electricity. Every F-35 fighter aircraft contains approximately 420 kilograms of rare earth materials, predominantly NdFeB magnets in guidance systems, actuators, and communications equipment.

The scale of NdPr demand growth is extraordinary. The International Energy Agency projects that demand for rare earth elements used in clean energy technologies will increase by a factor of three to seven by 2040, depending on the pace of the energy transition. BloombergNEF estimates that NdFeB magnet demand from the EV sector alone will exceed 100,000 tonnes per year by 2030, up from approximately 30,000 tonnes in 2022. Wind turbine installations, particularly the offshore turbines that use direct-drive generators, add further demand. Military modernisation programmes across NATO, driven by the geopolitical environment following Russia's invasion of Ukraine, are increasing defence demand for rare earth magnets in precision-guided weapons and advanced electronics.

It is against this backdrop of surging demand and concentrated supply that the Longonjo rare earth project in Angola assumes its strategic significance. Longonjo represents one of the most advanced non-Chinese NdPr-dominant rare earth projects in the world, and its location on the Benguela Railway within the Lobito Corridor makes it a uniquely positioned asset for Western supply chain diversification.

The Longonjo Deposit

Pensana Plc (formerly Pensana Rare Earths), listed on the London Stock Exchange, holds the Longonjo rare earth project through its Angolan subsidiary. The project is located approximately 3 kilometres from the town of Longonjo in Huambo Province, central Angola, and sits directly on the Benguela Railway line — a logistical advantage that distinguishes it from virtually every other rare earth project in the development pipeline globally.

Longonjo hosts a JORC-compliant mineral resource of substantial scale. The deposit is a weathered carbonatite, a type of intrusive igneous rock that is the source of most of the world's rare earth deposits, including the giant Bayan Obo deposit in Inner Mongolia that anchors China's production. The Longonjo carbonatite has been weathered over geological time, concentrating rare earth minerals in a near-surface oxide zone that is amenable to relatively straightforward open-pit mining and acid leach processing. The shallow depth of the mineralization, combined with the laterite-style weathering profile, means that mining can proceed with conventional open-pit methods without the deep excavation or hard-rock drilling required at some other rare earth deposits.

The mineral assemblage at Longonjo is particularly favourable. The deposit has a high proportion of NdPr relative to total rare earth content — approximately 30 to 35 percent of the total rare earth oxide (TREO) grade is composed of NdPr oxides. This NdPr enrichment is significant because not all rare earths are created equal in commercial terms. Cerium and lanthanum, which dominate many rare earth deposits, have limited demand and low prices. Neodymium and praseodymium command prices that are typically 5 to 10 times higher per kilogram than cerium, and their demand is growing far faster. A deposit enriched in NdPr is therefore substantially more valuable per tonne of ore processed than one dominated by light rare earths with limited market appeal.

Development Status

Pensana's development plan for Longonjo has evolved through several iterations. The company's original concept envisioned mining and concentrating rare earth minerals at Longonjo, then shipping the concentrate to a separation and refining facility at Saltend in the United Kingdom. The Saltend facility, located in a chemicals complex near Hull, was intended to be the first rare earth separation plant in the UK and one of the few outside China. This integrated mine-to-magnet-feedstock model was designed to create a fully non-Chinese rare earth supply chain from Angolan ore to European-manufactured NdPr oxide.

The Saltend facility received planning approval and initial construction work commenced, supported by UK government interest in critical mineral supply chain security. However, the project's financing has proven challenging. Rare earth separation is capital-intensive and technically demanding, requiring expertise that is concentrated in China and held by a limited number of Western specialists. Pensana has faced delays in securing the project financing needed to complete both the Longonjo mine development and the Saltend processing facility simultaneously.

Despite financing challenges, the geological asset at Longonjo remains robust. The deposit's quality, its NdPr enrichment, its near-surface profile, and its railway-side location are unchanged by the company's corporate and financial evolution. These characteristics ensure that Longonjo will remain a candidate for development regardless of which entity ultimately brings it to production. The strategic demand for non-Chinese NdPr supply is not diminishing; it is accelerating. The question is not whether a deposit like Longonjo will be developed, but when and by whom.

Chinese Processing Dependence

The fundamental challenge that Longonjo seeks to address is the global dependence on Chinese rare earth processing. Understanding the depth of this dependence is essential to understanding why a single deposit in central Angola has attracted the attention of Western governments, defence establishments, and industrial strategists.

China's rare earth processing dominance operates at multiple levels. At the mining level, China produces approximately 60 percent of global rare earth ore. But mining is not the critical chokepoint. Australia's Mount Weld mine (operated by Lynas Rare Earths) and the Mountain Pass mine in California (operated by MP Materials) together produce significant non-Chinese rare earth ore. The chokepoint is processing.

Rare earth processing involves three main stages. First, mined ore is concentrated through flotation, gravity separation, or acid leaching to produce a mixed rare earth concentrate. Second, the concentrate undergoes solvent extraction — a complex chemical process involving dozens of mixing and settling stages — to separate individual rare earth elements from one another. This separation step is the most technically demanding and capital-intensive, and it is overwhelmingly concentrated in China. Third, the separated rare earth oxides are reduced to metals and alloyed into the specific compositions required for magnet manufacturing. NdFeB magnet production itself is also dominated by Chinese companies, with China producing approximately 90 percent of the world's NdFeB magnets.

The consequence is a supply chain in which non-Chinese mining is possible but non-Chinese processing remains the exception. Lynas operates the only significant non-Chinese rare earth separation facility, located in Kuantan, Malaysia, and has been expanding its capacity and planning a US facility. MP Materials mines rare earth ore at Mountain Pass but, until recently, shipped its concentrate to China for separation — a paradox that illustrates the depth of processing dependence even when mining occurs on US soil. MP Materials is now commissioning its own separation facility in California, but it will take years to reach full capacity and even then will address only a fraction of US demand.

China has demonstrated its willingness to restrict rare earth exports for geopolitical purposes. In 2010, China temporarily halted rare earth exports to Japan during a territorial dispute over the Senkaku/Diaoyu Islands. The incident sent rare earth prices soaring and catalysed international awareness of the vulnerability created by Chinese supply concentration. More recently, China has imposed export controls on rare earth processing technology, preventing Chinese companies from sharing separation expertise with foreign partners and making it more difficult for non-Chinese rare earth processors to develop competitive operations.

Western Supply Diversification

Longonjo fits into a broader Western strategy to diversify rare earth supply chains away from Chinese control. This strategy operates on multiple fronts — developing new mines, building non-Chinese processing capacity, investing in magnet manufacturing, and establishing recycling infrastructure — and it is driven by both industrial policy and national security imperatives.

Government Support and Strategic Alignment

The United States, the United Kingdom, and the European Union have all identified rare earth supply chain diversification as a priority. The US Department of Defense has invoked the Defense Production Act to support rare earth projects. The US Inflation Reduction Act's critical mineral sourcing requirements create financial incentives for non-Chinese rare earth supply. The UK government has signalled support for domestic rare earth processing, with the Saltend facility representing a cornerstone of British critical mineral strategy. The EU Critical Raw Materials Act establishes targets for domestic rare earth processing capacity.

Longonjo's alignment with these policy frameworks is direct. Rare earth concentrates from Longonjo, processed at a UK or other Western separation facility, would qualify for IRA sourcing requirements and EU CRMA compliance. The mine-to-market supply chain would be entirely non-Chinese at every stage: Angolan mining, Western processing, Western magnet manufacturing. This end-to-end non-Chinese provenance commands a premium in the current geopolitical environment and is an explicit requirement for defence applications.

Competitive Landscape

Longonjo is not the only non-Chinese rare earth project in development. Lynas Rare Earths (Australia/Malaysia) is the incumbent Western rare earth producer, with mining at Mount Weld and separation at Kuantan and a planned expansion in Kalgoorlie. MP Materials (USA) is building separation capacity at Mountain Pass. Ucore Rare Metals (Canada) is developing the Bokan Mountain deposit in Alaska with separation technology licensed from Innovation Metals Corp. Mkango Resources (Malawi) is developing the Songwe Hill rare earth project. Arafura Resources (Australia) is developing the Nolans deposit in the Northern Territory. Each of these projects faces its own development challenges, and the cumulative timeline to bring all of them to production spans the better part of a decade.

Longonjo's comparative advantages within this competitive landscape are its NdPr-rich grade, its near-surface mining profile (which implies lower capital and operating costs than hard-rock deposits), and its location on the Benguela Railway. The railway connection is a meaningful differentiator: most rare earth deposits are in remote locations requiring dedicated transport infrastructure, whereas Longonjo can access rail transport to the Port of Lobito with minimal incremental logistics investment. For a commodity with a mine-gate value of $5,000 to $15,000 per tonne of concentrate, transport costs are a smaller proportion of total value than for bulk commodities like copper or iron ore, but the logistical simplicity of a railside location still reduces development risk and operating cost.

End-Use Demand Trajectory

The demand trajectory for NdPr magnets reinforces the investment case for Longonjo. Every electric vehicle produced with a permanent magnet motor consumes approximately 1 to 3 kilograms of NdFeB magnets, containing roughly 30 percent NdPr by weight. With global EV production projected to exceed 30 million units per year by 2030 and potentially 60 million by 2035, the automotive sector alone will require tens of thousands of additional tonnes of NdPr oxide annually. Offshore wind turbines, each containing 500 to 600 kilograms of NdFeB magnets in direct-drive generators, add further demand. Defence applications, while smaller in absolute tonnage, carry the highest supply security requirements and the greatest willingness to pay premium prices for non-Chinese material.

Benguela Railway and Corridor Integration

Longonjo's location on the Benguela Railway is not a coincidence of geography. The carbonatite intrusion that hosts the rare earth deposit was emplaced by geological processes millions of years ago, but the railway that passes alongside it was built in the early twentieth century along a route selected for its gentle gradients through the Angolan central highlands. The same topographic features that made the Longonjo area suitable for railway construction — a broad valley at moderate altitude — also correlate with the geological conditions that produced and preserved the weathered carbonatite deposit.

The Benguela Railway forms the Angolan backbone of the Lobito Corridor. From Lobito on the Atlantic coast, the railway climbs through the escarpment to the plateau towns of Benguela, Huambo, and Kuito before crossing into the DRC toward the Copperbelt mining region. Longonjo sits on this main line between Huambo and Kuito, approximately 400 kilometres from the port. The Lobito Atlantic Railway (LAR) concession, which operates the Angolan segment, is investing in track rehabilitation, locomotive and wagon procurement, and signalling upgrades that will increase the railway's capacity and reliability.

For Longonjo, railway access means that rare earth concentrate produced at the mine can be loaded directly onto rail wagons and transported to the Port of Lobito for export. From Lobito, shipping times to European ports are approximately 14 days, compared to the longer transit times required from rare earth operations in Australia or North America. The railway eliminates the need for dedicated road transport, reduces per-tonne logistics costs, and avoids the road congestion and border-crossing delays that affect mining operations dependent on trucking.

Corridor as Supply Chain Architecture

The integration of Longonjo into the Lobito Corridor has implications beyond logistics. The corridor is being developed as a Western-aligned mineral supply chain, with financing from the US DFC, the EU Global Gateway, and multilateral development banks. Mining companies that use corridor infrastructure benefit from the political and diplomatic support that Western governments provide to the corridor as a strategic project. Longonjo, as a rare earth project using the corridor to supply Western markets with non-Chinese NdPr, aligns perfectly with the corridor's strategic rationale.

The corridor also offers the potential for in-corridor value addition. Rather than shipping raw rare earth concentrate to the UK or another distant processing location, it is conceivable that separation capacity could eventually be developed within Angola itself, either at the mine site or at an industrial facility along the railway corridor. Angolan rare earth separation would reduce transport costs (processed NdPr oxide is lighter per unit of value than bulk concentrate), retain more value within the Angolan economy, and further shorten the supply chain from mine to magnet manufacturer. This prospect remains speculative — rare earth separation requires significant technical expertise and capital — but it aligns with both Angola's beneficiation ambitions and the Western goal of building resilient, geographically diverse processing capacity.

Risks and Uncertainties

Longonjo faces genuine development risks that must be acknowledged alongside its strategic attractiveness. Financing remains the primary challenge: rare earth projects are capital-intensive, and the current price environment for NdPr, while elevated relative to historical averages, has been volatile enough to complicate project economics and deter risk-averse lenders. The Saltend processing facility's construction timeline has slipped, raising questions about the integrated mine-to-oxide business model. Pensana's corporate balance sheet has been strained by the parallel development of the mine and the processing plant, and the company has needed to restructure its capital base.

Permitting and social licence in Angola, while generally more straightforward than in Western jurisdictions, are not without complexity. The Angolan government has been supportive of rare earth development, viewing it as a diversification opportunity for a province whose economy is dominated by agriculture. However, the government's expectations for local content, employment, and community benefit must be met, and the regulatory framework for rare earth mining — a commodity with which Angola has no historical experience — is still evolving.

Despite these risks, Longonjo's strategic position is difficult to replicate. It is an NdPr-rich rare earth deposit, near-surface, on a railway, in a country that is receptive to Western mining investment, within a corridor that is backed by billions in Western infrastructure financing. The convergence of these factors makes Longonjo one of the most strategically significant rare earth assets outside China, and its development — whether by Pensana or a successor — will be watched closely by every government, automaker, wind turbine manufacturer, and defence agency that depends on NdPr magnets.

Resource estimates reflect Pensana Plc's published JORC-compliant figures. Project development status reflects the most recent company disclosures and may have changed since publication. This content is for informational purposes only and does not constitute investment advice.