Aim-listed miner Savannah Resources is embarking on a transformational partnership with major Rio Tinto to develop a new mine in Mozambique.
Savannah’s wholly owned subsidiary, AME East Africa, has entered into a joint venture agreement with the FTSE 100 group, City A.M. can reveal.
The two companies will develop a large-scale commercial heavy minerals sands mining project in Mozambique, combining Savannah’s Jangamo operation with Rio Tinto’s Mutamba, Dongane and Chilubane prospects.
Savannah’s initial participating interest in the joint venture will be 10 per cent. It will operate the joint venture, and stands to earn up to a 51 per cent interest in the project. Rio Tinto will provide all its existing camp, facilities and associated equipment, which the companies said will help to accelerate development.
According to Savannah, the combined projects have the potential to sustain a “significant mining operation” for over 20 years.
The firm, which listed on the junior market in 2010, said its overall objective is to build a “mineral sands presence of significance” delivering a “stable supply of titanium feedstock to global markets and wealth creation for the people of Mozambique”.
Savannah’s chief executive, David Archer, said the amalgamation of the projects “makes enormous sense as it combines three areas which are effectively part of the same, continuous mineralisation trend”.
Shares in Savannah closed trading last week at 2.08p.