Sovereign Metals to receive $40.4m investment from Rio Tinto with proceeds to bolster major Malawi project

Rio Tinto will invest $40.4 million and acquire a 15 per cent stake in Sovereign Metals, which through its Kasiya project in central Malawi controls the world’s largest natural rutile deposit. As part of the investment — disclosed to the Australian Securities Exchange on Monday — Rio will receive 83.1m new shares in Sovereign priced at 49¢ each, with Rio in turn to provide Sovereign with technical and marketing advice for Kasiya, including for production of graphite for the lithium battery market. Rio will also have the option to acquire a further 4.99 per cent stake within 12 months through the acquisition of 34.5m shares priced at 53¢ each. That deal, which would be worth $18.5m, would make Rio the second biggest shareholder in Sovereign if it goes ahead. Sovereign chairman Ben Stoikovich said Rio’s interest affirmed the significance of the Kasiya project. “The experience and expertise that Rio Tinto brings will truly set Kasiya apart as a potentially globally significant supply of two critical minerals and take us all a step close to supply chain decarbonisation and achieving net zero,” he said. Per the results of an expanded scoping study announced in June 2022, Sovereign claims Kasiya harbours the world’s largest deposit of rutile at 18 million tonnes. Shares in Sovereign last traded at 50¢ while Rio shares finished trading on Friday at $119.02.