Shenghe Resources Reports Increased Rare Earths Output and Sales for First Half of 2024

Rising demand from various sectors drives revenue growth despite net loss

Chinese rare earths producer Shenghe Resources has reported a significant rise in output and sales of rare earth oxides and metals for the first half of 2024. The company achieved a 36% year-on-year revenue increase, reaching 5.43 billion yuan ($764.86 million). However, Shenghe posted a net loss of 68.51 million yuan, a sharp contrast to the net profit of 83.97 million yuan recorded in the same period last year. This loss was attributed to declining sales prices and gross profit margins, driven by a steep drop in rare earth and zirconium-titanium product prices and rising costs of raw materials.

Expansion and Investments

Shenghe Resources is actively expanding its global footprint by accelerating overseas resource acquisitions and enhancing its supply chains. In late July, the company announced plans to acquire a 50% additional stake in the Tanzanian rare earth mining company Ngualla Group UK Limited, a wholly owned subsidiary of Peak Rare Earth. Additionally, Shenghe acquired an 18.2% stake in Vital Metal, an Australian rare earths exploration firm with projects in Canada and Tanzania. Shenghe’s Vietnamese subsidiary, Vietnam Rare Earth, is also partnering with Blackstone Minerals to develop a fully-integrated rare earths value chain in Vietnam.

The company has made substantial investments to secure its resource base and feedstock supply, including a A$43 million investment to acquire Strandline Resources UK from its parent firm. Shenghe also operates several production facilities across China and Vietnam, with ongoing projects such as a 2,000-ton-per-year rare earth metal facility and a 3,300-ton-per-year rare earth oxide project expected to start production in the coming months.