Shenghe Resources Commences Heavy Mineral Sands Production in Tanzania

Shenghe

Shenghe Resources, a Chinese rare earths producer, has announced the commencement of heavy mineral sands production at line 1 of the Fungoni project in Tanzania.  The Fungoni project is owned by Nyati Mineral Sands, a subsidiary of Strandline Resources UK (SRUL), whose parent company is the Australian minerals producer Strandline Resources. In May 2024, Ganzhou Chenguang, a subsidiary of Shenghe Resources, entered into an agreement to acquire 100% of SRUL from Strandline Resources.

Expansion Plans and Resource Base

Additional production lines at the Fungoni project are expected to come online before September 2025, reaching a total production capacity of 100,000 tonnes per year of heavy mineral sands.  Shenghe stated that this project will expand its heavy mineral sand resources and secure its feedstock supplies. Ganzhou Chenguang has paid a total of A$43 million ($26.77 million) to Strandline Resources, with A$27.18 million for the stake acquisition and the remainder for loan repayment. 

SRUL holds an 84% stake in Nyati Mineral Sands, which operates the Fungoni, Tajiri, Sudi, and Bagamoyo heavy mineral sand mines in Tanzania. Nyati holds mining rights for Fungoni and Tajiri, while Sudi and Bagamoyo are still under exploration. The Tanzanian government owns the remaining 16% of Nyati. The Fungoni project boasts an ore resource of 22 million tonnes with an average heavy mineral sand grade of 2.8%, while the Tajiri project has an ore resource of 268 million tonnes with an average grade of 3.3%. Shenghe did not disclose details on construction schedules or launch dates for Nyati's other projects.

Shenghe's Global Expansion and Financial Performance

Shenghe has been actively pursuing overseas resource expansion to develop global supply chains and improve profitability.  The company recently acquired an 18.2% stake in Australian rare earths exploration firm Vital Metals, which owns two rare earth resource projects: the Nechalacho bastnaesite mine in Canada and the Wigu Hill deposit in Tanzania. Shenghe's Q3 2024 revenue was 2.8 billion yuan ($381 million), down 38% year-on-year, while net profit rose 118% to 161 million yuan.  

From January to September 2024, revenue reached 8.24 billion yuan, a 37% decrease year-on-year, and net profit fell 41% to 92.87 million yuan. Shenghe attributed these declines to lower rare earth prices caused by ample spot supplies and weaker-than-expected consumer demand. Average praseodymium-neodymium metal prices fell 28% to 477 yuan/kg ex-works during this period. Despite the price pressures, Shenghe reported increased output and sales of rare earth oxides and metals in the first nine months of 2024, driven by stronger demand from the NEV, wind turbine, energy-saving appliance, and consumer electronics sectors.