Peak Rare Earths inks Tanzania supply deal with China's Shenghe (updated)

Peak Rare Earths

09/08/2023 01:28

(Recasts first paragraph, adds details and quotes)
       Aug 9 (Reuters) - Australia's Peak Rare Earths Ltd
 PEK.AX  said on Wednesday it will supply rare-earths
concentrate from its Ngualla project in Tanzania to the
Singapore-based unit of China's Shenghe Resources  600392.SS .
    The agreement will be for an initial term of seven years and
Peak will provide 100% of rare-earths concentrate from Ngualla
to Shenghe Singapore, which holds an about 19.8% stake in the
Australia-listed rare earths firm.
    The companies also signed a memorandum of understanding
(MoU) to negotiate a fixed price for the supply deal while
working on a funding solution for the project.
    The Ngualla project is expected to begin construction by the
end of May 2024, with completion and development eyed in early
2026.
    "Peak and Shenghe have also agreed to co-operate around
opportunities to further optimise the Ngualla project with
respect to capital expenditure, operating costs and concentrate
grade and recoveries," Peak Rare Earths said in a statement.
    The MoU has an option for Shenghe to buy a non-controlling
stake in the project to substantially reduce Peak's funding
requirements.
    "Shenghe regards the Ngualla project as the premier
undeveloped rare earth project in the world," said Huang Ping,
deputy executive chairman of Shenghe Resources.
    Shenghe Resources is the largest importer of rare-earths in
China.

 (Reporting by Rishav Chatterjee in Bengaluru; Editing by
Subhranshu Sahu)
 ((Rishav.Chatterjee@thomsonreuters.com;))