Japan pours $7B into African corridor backing Sovereign’s project

[Ben Graham]

Japan has committed $7 billion to develop the Nacala Logistics Corridor, a project expected to boost Sovereign Metals’ (ASX: SVM) (LON: SVML) Kasiya rutile-graphite project in Malawi.

The Ministry of Foreign Affairs, working with the African Development Bank, will direct funds toward capacity expansion, refurbishment and resilience upgrades across Malawi, Zambia and Mozambique.

The program, called Strengthening Global Supply Chain through Nacala Corridor Development, is designed to secure critical mineral supply chains, improve transport reliability and ease congestion. Kasiya, which already has access to Japanese titanium markets, stands to benefit directly.

The investment was unveiled at the ninth Tokyo International Conference on African Development in Yokohama from August 20 to 22. It includes $5.5 billion through the Enhanced Private Sector Assistance for Africa program, which channels development funding via the African Development Bank. A further $1.5 billion will come through Japan’s development agency to support private sector projects, including mining and infrastructure.

“We will launch a new region-wide co-creation for common agenda initiative that promotes logistics in the Nacala Corridor, which contributes to strengthening mineral resource supply,”Prime Minister Shigeru Ishiba said in his keynote address.

Shares in the miner jumped on the news and were trading in London 1.5% higher at 33.5p each by mid-afternoon. That leaves the company with a market capitalization of A$427 million ($283m).

Certified quality

Japan’s Toho Titanium confirmed in June that rutile from Kasiya meets the standards required for high-performance titanium production. The certification strengthened Japan’s critical minerals strategy and validates Kasiya’s global potential.

Kasiya project on the Nacala Corridor. (Image courtesy of Sovereign Metals.)

Sovereign Metals chief executive Frank Eagar said Japan’s support reinforces the project’s economics and its role in global supply chains. “The initiative demonstrates the highest level of government backing for the corridor that underpins our project economics, while Japan’s focus on securing critical mineral supply chains aligns perfectly with Kasiya’s world-class rutile and graphite resources,” he said.

The Nacala Corridor serves as the preferred transportation route for Sovereign’s forthcoming Definitive Feasibility Study for Kasiya. It offers direct access to the deep-water port of Nacala, cutting transport costs and improving market reach. Sovereign plans to build a six-kilometre rail spur to connect its processing plant to the corridor and is negotiating with regional logistics providers to ensure efficient shipment of rutile and graphite to international markets.