London-listed Pensana is advancing development of the Longonjo rare earths project in Angola, targeting commissioning of mixed rare-earth carbonate production in 2027 as the company adopts a phased approach to mining, processing and downstream development.
Longonjo Project Targets 2027 Production
The Longonjo rare earths project is currently valued at approximately US$250 million and is expected to have an operating life of around 20 years. Pensana has received approvals for a financing package of approximately US$268 million, although the funding remains subject to definitive documentation and the fulfilment of conditions precedent.
The proposed financing structure has included approximately US$160 million in debt, with around US$81.2 million from Africa Finance Corporation and US$78.8 million from Absa. The broader package also includes support from Angola’s sovereign wealth fund, FSDEA, as well as convertible or equity-linked financing instruments.
UK Rare Earths Separation Plant Deferred
Pensana’s original strategy included the development of a major rare-earth separation facility at Saltend near Hull in the UK. The proposed plant was expected to require between US$195 million and US$250 million in investment and would have processed material from Longonjo into separated rare-earth products. The Saltend separation project has been deferred as Pensana prioritises bringing the Angolan mine into production and establishing cash generation before committing to a major downstream processing investment. The change represents a significant adjustment to the project’s development sequence. Instead of constructing the mine and a large-scale separation facility simultaneously, Pensana is focusing first on Longonjo production, with downstream separation to follow at a later stage.
Initial Production to Stop at Mixed Rare-Earth Carbonate
Under the revised strategy, Longonjo’s initial value chain will end with the production of mixed rare-earth carbonate, rather than separated rare-earth magnet oxides being manufactured in Britain. This distinction is commercially important. While the project remains closely connected to Europe through Pensana’s London listing, engineering base and original UK industrial strategy, the immediate processing chain will no longer extend to final separated magnet materials in the United Kingdom.
The company will therefore need to establish arrangements with external separation facilities and secure appropriate offtake channels for its intermediate product during the project’s initial operating period.
Phased Development Reduces Capital Risk
The decision to defer the UK separation facility allows Pensana to pursue a more phased capital strategy. Developing the mine first reduces the need to finance and construct two major parts of the value chain at the same time. It also gives the company an opportunity to demonstrate Longonjo’s operating performance and generate cash before taking on the additional capital requirements and construction risks associated with a large downstream separation plant.
For a capital-intensive rare-earth project, this sequencing can reduce simultaneous execution risk and provide greater flexibility over the timing of future downstream investment. The strategy also creates a new dependency on third-party processing capacity until Pensana establishes its own separation infrastructure or secures a long-term alternative.
China Remains a Key Factor in Rare Earth Processing
The choice of interim processing partner could have wider implications for Pensana’s ambition to contribute to the diversification of Western rare-earth supply chains. Although Longonjo would provide rare-earth production outside China, the project would not automatically represent a fully independent supply chain if its carbonate output ultimately depends on processing and separation capacity controlled by established global operators.
China continues to dominate global rare-earth separation, making the destination and ownership of downstream processing particularly important for companies seeking to build alternative supply chains for critical minerals. Pensana’s ability to demonstrate genuine supply-chain diversification will therefore depend not only on successfully developing the Longonjo mine, but also on how its mixed rare-earth carbonate is processed into higher-value separated products.
Longonjo’s Role in Europe’s Rare Earth Strategy
The deferral of Saltend means that Pensana’s original vision of an integrated Angola-to-UK rare-earth supply chain will not be delivered in the first stage of the Longonjo project. Nevertheless, the project retains a strong European connection through Pensana’s UK corporate and engineering operations and its longer-term objective of developing downstream processing capacity. The immediate priority is now to advance Longonjo toward 2027 commissioning, complete the required financing arrangements and establish reliable routes for processing and marketing the project’s initial carbonate production.
Next Phase Critical for Pensana
Longonjo is entering an important stage of development in which construction progress, financing completion, production ramp-up and external separation arrangements will determine the project’s near-term commercial performance. The phased strategy gives Pensana a potentially less capital-intensive route to first production, while preserving the possibility of a future downstream separation investment.
For now, however, the company’s rare-earth strategy has shifted from simultaneously building an Angolan mine and UK separation facility to a more cautious sequence: develop Longonjo, begin production, generate cash and then assess the timing of downstream separation. That approach could improve the project’s financing and execution profile, but it also means that the original ambition of producing separated rare-earth magnet materials in Britain remains a longer-term objective rather than part of the initial Longonjo production chain.
