Rio Tinto increases sovereign graphite mining stake by 19.7%

Sovereign will use the funds to develop the Kasiya rutile/graphite project in Malawi.

Diversified mining group Rio Tinto will increase its stake in ASX and Aim-listed Sovereign Metals to 19.76%.

Rio exercised approximately 35 million share options to acquire the same number of fully paid new ordinary shares of the sovereign at a price of A$0.535 each, generating proceeds of US$18.5 million.

Harsh project

Rio previously held a 15% stake in the company, with an option to acquire more shares within 12 months of the IPO. Sovereign will use the funds to develop the Kasiya rutile/graphite project in Malawi, including conducting an optimization study.

Sovereign is developing the project into a world-class mine capable of supplying critical minerals to the titanium pigment, titanium metal and lithium-ion battery industries.

In addition to its role as a shareholder, Rio is also providing Sovereign with assistance and advice on the technical and marketing aspects of the Kasiya project through a joint technical committee established between the two companies.

Frank Eger, CEO of Sovereign, says the company, along with Rio, has made significant progress in developing Kasiya over the past year, including the successful launch of the pilot phase in May.

“Rio’s new investment in the company reaffirms Cassia’s position as one of the most important critical minerals projects worldwide,” he noted.

“With Rio Tinto’s experience as one of the world’s largest and most successful mining companies, Kasiya is well positioned to become a market leader in low-carbon rutile and graphite flake,” concluded Sovereign Chairman Ben Stojkovic.