UK investment firm Kazera Global says it has signed an agreement to spend £750 000 (Sh108.16 million) in buying a 71 percent stake in Great Lakes Graphite which has interests in rare metal mines in Nyanza.
The proposed transaction comes as more global firms rush to secure new sources of rare metals in Africa amid shortages and rising demand from fast-growing industries including electric vehicles.
Kazera said in a statement it signed an agreement with Great Lakes to pay the amount in three stages.
Great Lakes says it is an East African-focused company exploring and developing new graphite mines and projects to meet the increased demand from the fast-growing green technology and renewable energy and electric vehicle sectors. Great Lakes fully owns the three licences covering the Homa Bay and Buru Hill rare earth projects.
As part of the transaction, Kazera will also grant an option to Caracal Investments Limited to acquire 20 percent of Great Lakes for $1 million (Sh118 million).
“Assuming the exercise of the option the shareholding of Great Lakes Graphite will be 51 percent Kazera, 20 percent Caracal and 29 percent current shareholders,” Kazera said in a statement.
Under the deal, the firms said Great Lakes is undertaking a scoping study and will also publish a mineral resource estimate within the next six months.
Thereafter, the licences will undergo a low-impact work programme to progress to a definitive feasibility study, which will cost about $2.5 million (Sh293.75 million) and take 24 to 30 months to complete.
Historic data estimates the area contains 65,000 tonnes of cerium, 52,000 tonnes of lanthanum and 18,000 tonnes of neodymium, said the firms.
Rare earth elements are a major constituent material in the manufacture of magnets used for electronic vehicles and turbines.