Shenghe Resources Acquires Significant Interest in Ngualla Rare Earth Project

Chinese rare earth producer Shenghe Resources is set to acquire an additional 50% interest in the Tanzanian rare earth mining company Ngualla Group UK Limited (NGUK), aiming to further develop the Ngualla project in Tanzania. This acquisition, valued at A$96 million (approximately $63.38 million), will enhance Shenghe's cooperation with Australian mining company Peak Rare Earth (PRE), which currently owns NGUK and holds an 84% stake in the Ngualla project.

This strategic move will significantly increase Shenghe's equity in the Ngualla project, accelerating its development and anticipated start-up. Upon the project's commencement of commercial production, Shenghe will be entitled to 55% of net profits or losses after taxes within the first five years, due to its technical expertise and financial contributions.

Shenghe had previously acquired a 19.9% stake in PRE in early 2022, becoming its largest shareholder. In August 2023, Shenghe and PRE signed a binding offtake agreement, securing Shenghe's access to 100% of the rare earth concentrate or at least 50% of intermediate and final rare earth products from Ngualla.

Construction of the Ngualla project began at the end of May, with completion expected by early 2026. The project is designed to produce 37,200 tons per year of rare earth oxide equivalent from 800,000 tons of processed rare earth ores annually. The Ngualla site boasts rare earth resources of 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 has been actively expanding its global resource base to enhance its supply chains and profitability. The company recently acquired an 18.2% stake in Australian rare earth exploration firm Vital Metal, which operates the Nechalacho bastnaesite mine in Canada and the Wigu Hill deposit in Tanzania. Additionally, Shenghe's holding company, Vietnam Rare Earth, has reached a preliminary agreement with Australian developer Blackstone Minerals to establish a fully-integrated rare earth value chain in Vietnam.