ASX-listed Ionic Rare Earths (IonicRe) is celebrating the granting of a mining licence for its Makuutu project in Uganda, a development that sets the project on target for first production over the next two years.

IonicRe announced in an update the milestone was achieved after Uganda Minister of Energy and Mineral Development Ruth Nankabirwa Ssentamu signed and issued the large-scale mining licence (LML) 00334 for the project -- the first one awarded in the East African nation.

The awarding of the licence brings on further supply chain and off-taker engagement, and positions Makuutu for a targeted final investment decision later this year and first production in 2026, IonicRe said.

The licence was granted to Rwenzori Rare Metals Ltd, owner of the Makuutu project, and covers approximately 44km2 of the project near 300km2 of tenements at Makuutu.

IonicRE controls a 94% in Rwenzori and the Makuutu project having increased its shareholding from 60% and is holding discussions with partners on the remaining 6% ownership.

“The formal awarding of the mining license at Makuutu to Rwenzori enables discussions with potential strategic and supply chain partners to progress to the next stage to bring Makuutu and a new supply of magnet and heavy rare earths to market,” IonicRE managing director Tim Harrison said in the update.

The granting of the licence comes when IonicRe is making progress on the Makuutu demonstration plant, which is critical in de-risking the commercialisation of the project through the production of value-added, mixed rare earth carbonate (MREC), it said.

The firm is targeting the first mixed rare earth carbonate production in the first quarter of this year.

IonicRe also announced that the Ugandan Directorate of Geological Survey and Mines has also renewed the highly prospective Exploration Licence 00147, which covers the majority of IXR’s existing exploration target at Makuutu and offers potential for long-term growth for the project.