LONDON: Pensana PLC (LSE: PRE) announced Thursday it has signed a non-binding memorandum of understanding with Japan’s Toyota Tsusho Corporation for a rare earth offtake agreement, marking a key step in establishing a new sustainable supply chain.
Under the proposed terms, Toyota Tsusho could purchase up to 20,000 metric tons per year of ultra-clean mixed rare earth carbonate from Pensana’s Longonjo mine in Angola over a five-year period. Pricing details remain under negotiation.
The partnership aims to develop an independent rare earth supply chain utilizing Toyota Tsusho’s Indian processing facility, operated by its subsidiary Toyotsu Rare Earth India. The companies will also explore further collaboration across the rare earth value chain.
Toyota Tsusho, the trading arm of the Toyota Group, has processed rare earth materials in India since 2013 to meet growing demand from Japanese magnet manufacturers.
“This MOU represents a significant step in developing a global rare earth supply chain,” said Tsutomu Aoki, general manager of Toyota Tsusho’s Metal Resources Department. “It will strengthen and diversify the broader rare earth value chain.”
Pensana Chairman Paul Atherley called the deal a “strategic step” in positioning Longonjo as a major rare earth development. The Angola-based project holds one of the world’s largest undeveloped high-grade neodymium and praseodymium deposits, with an estimated 20-year mine life.
Initial production is expected to yield 20,000 metric tons of mixed rare earth carbonate annually, with potential expansion to 40,000 metric tons — roughly 5% of global supply for permanent magnets used in electric vehicles and wind turbines.
The agreement underscores Pensana’s push to build a resilient rare earth supply chain amid rising demand for clean energy technologies.
Toyota Tsusho, founded in 1948, is the trading arm of the Toyota Group, operating in sectors including automotive, metals and energy. Through its subsidiary Toyotsu Rare Earth India, it has processed rare earth materials since 2013. The company is actively involved in sustainable supply chain initiatives.
Located in Angola’s Huambo province, the Longonjo rare earth project has a JORC-compliant reserve of 22 million metric tons grading 3.04% total rare earth oxides, including significant neodymium and praseodymium. Pensana has invested over $70 million in exploration and development over six years.