Stonegate Capital Partners has initiated coverage on Pensana PLC (LSE: PRE), highlighting the company's unique position in the rare earth supply chain at a time when Western nations are prioritizing secure access to critical minerals. Pensana stands out as one of the few developers outside China pursuing a full mine-to-magnet model, capturing value across the entire rare earth supply chain rather than relying on traditional dig-and-ship approaches. The company's strategic alignment with Western supply chain security goals is particularly significant given China's near-total dominance in rare earth refining.
Pensana has developed a U.S.-facing downstream strategy that includes a memorandum of understanding with ReElement Technologies, providing a direct pathway for Longonjo feedstock to be refined and separated in the United States and linked to magnet manufacturing. This approach has already generated strong market interest, with offtake agreements and MoUs covering multiples of Stage 1 capacity. Pensana's Longonjo project in Angola represents one of the highest-ranked undeveloped neodymium-praseodymium (NdPr) deposits globally, with Stage 1 expected to deliver approximately 5% of global NdPr supply.
The project benefits from robust financing support, having raised $268 million from the Angolan Sovereign Wealth Fund (FSDEA), the African Finance Corporation, and Absa Bank. This places Longonjo among the very limited number of rare earth mines worldwide that are fully funded and in construction, with a modest $217 million Stage 1 capital expenditure supported by Lobito Corridor rail and hydroelectric infrastructure. The significance of NdPr cannot be overstated in today's technology-driven economy, as these rare earth elements are indispensable for permanent magnets used in electric vehicles, offshore wind turbines, robotics, drones, and defense technologies.
Demand growth remains strong, with EV sales projected to exceed 40 million annually by 2030 and offshore wind capacity expected to rise more than sevenfold by 2050. With rare earths underpinning over $3 trillion in industrial applications, Pensana's strategic positioning addresses critical supply chain vulnerabilities. Construction at Longonjo is progressing on schedule with contractors mobilized on site, backed by a 20-year mine life. The company also controls the Coola license and Sulima West prospect, where drilling has identified strong mineralization and metallurgical testing confirms potential as supplemental feedstock.
Coola, similar in scale to Longonjo, provides optionality for mine-life extension, grade optimization, and future expansion, reinforcing Pensana's ability to scale production and maintain long-term relevance in the supply chain. Looking forward, Pensana's investment case rests on three pillars: delivery of Longonjo as one of the lowest-capital-intensity NdPr projects globally, expansion through Coola and Sulima West to extend mine life and resource scale, and alignment with U.S. and allied downstream strategies that remove reliance on Chinese refining dominance. With production scheduled ahead of the U.S. Department of Defense's 2027 China-free supply chain target, Pensana is strategically positioned to emerge as a cornerstone Western supplier.
