Dual-listed Pensana Rare Earth has entered into a heads of agreement with China Great Wall Industry Corporation (CGWIC) for the purposes of cooperating at Pensana's Longonjo rare earths project in Angola.

CGWIC is a company with expertise and experience in international engineering and is actively engaged in a range of engineering projects in Africa.

Pensana intends to proceed with an engineering, procurement, construction and financing (EPCF) model for the development of Longonjo to ensure the design and construction of the processing plant and associated infrastructure is funded through a single arrangement.

The heads of agreement establishes the framework for Pensana and CGWIC to work together to negotiate and engage in discussions for CGWIC to be engaged as the contractor for the purposes of the engineering, procurement and construction works for Longonjo and for the company to procure financing for these project works.

The heads of agreement contemplates that Pensana will seek the proposed debt financing component of the EPCF to be obtained from commercial banks in China with credit insurance from Sinosure.

Pensana will seek to obtain such finance on the following indicative terms: debt funding to cover no more than 85% of project development costs (the company is to be responsible for funding the remainder) and the term of the facility depending on the particular terms from commercial banks and the life cycle of the project, but the expectation being that it will not exceed eight to ten years.

“We are delighted to enter into this heads of agreement with CGWIC. With Angolan Presidential approval and backing from the Angola sovereign wealth fund, Pensana is rapidly developing Longonjo as the first major rare earths mine to be brought on line in over a decade to help meet the rapidly growing demand for the magnet metals critical for electric vehicles and offshore wind turbines and a range of other applications important for the transition towards a green economy.

"CGWIC brings to the project a successful record in major project development in Angola and funding from China. We are very much looking forward to working harmoniously with CGWIC and achieving important outcomes for Angola, CGWIC and Pensana’s shareholders,” says Pensana chairperson Paul Atherley.