Shenghe Resources, a prominent Chinese rare earth producer, has announced its acquisition of an additional 50% interest in Ngualla Group UK Limited (NGUK), a Tanzanian rare earth mining company. The transaction, worth A$96 million (approximately $63.38 million), aims to boost the development of the Ngualla rare earth project in Tanzania. This deal will solidify Shenghe’s partnership with Australian mining firm Peak Rare Earth (PRE), which wholly owns NGUK and holds an 84% stake in the project.
The acquisition will significantly increase Shenghe's equity stake and expedite the project's development. Once the Ngualla project commences commercial production, Shenghe will receive 55% of net profits or losses after taxes within the first five years, owing to its technical prowess and financial backing.
Shenghe initially acquired a 19.9% stake in PRE in early 2022, becoming the largest shareholder. In August 2023, Shenghe and PRE signed a binding offtake agreement, ensuring Shenghe receives 100% of the rare earth concentrate or at least 50% of intermediate and final rare earth products from Ngualla.
Construction on the Ngualla project began in late May and is expected to be completed by early 2026. The project boasts a rare earth concentrate output capacity of 37,200 tons per year from 800,000 tons of processed ore annually. Ngualla's resources include 4.61 million tons of rare earth oxide (REO) and reserves of 887,000 tons of REO, with an average grade of 4.8% and a praseodymium-neodymium oxide content of 21.26%.
Shenghe is aggressively expanding its global resource base to enhance its supply chain and profitability. Recently, it acquired an 18.2% stake in Australian rare earth exploration firm Vital Metals, which operates the Nechalacho bastnaesite mine in Canada and the Wigu Hill deposit in Tanzania. Additionally, Shenghe's subsidiary, Vietnam Rare Earth, has reached an initial agreement with Australian developer Blackstone Minerals to establish an integrated rare earth value chain in Vietnam.
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RAW MATERIAL
