China's CNMC agrees to work on Madagascar rare earth project

Reenova Investment Holding

24/06/2019 13:04

BEIJING, June 24 (Reuters) - A unit of China Nonferrous
Metal Mining Group (CNMC)  SASACV.UL  said on Monday it had
signed a non-binding memorandum with Singapore-listed ISR
Capital  ISRC.SI  that could see the Chinese firm work as a
contractor on a rare earths project in Madagascar with rights to
purchase products.
    China Nonferrous Metal Industry's Foreign Engineering and
Construction Co Ltd  000758.SZ  said in a filing to the Shenzhen
stock exchange it had priority rights to be the engineering,
procurement and construction (EPC) contractor for ISR's Tantalus
rare earths project, the memorandum of understanding said.
    No value was put on the agreement but the Chinese company
will also have the right to purchase 3,000 tonnes of rare earth
products from the project within three years of the start of
production and the opportunity to make an equity investment in
future, it added, without giving a timeframe for the launch.
    A 2017 ISR filing to the Singapore Exchange said the
Tantalus project, which is approximately 500 km (311 miles)
north of Madagascan capital Antananarivo, contained 562,000
tonnes of rare earth oxides.
    China is the world's dominant producer of rare earths, a
group of 17 chemical elements used in a wide range of consumer
electronics, and is considering restricting supply in its
long-running trade war with the United States.  urn:newsml:reuters.com:*:nL4N23B36I
    Chinese companies have also made moves into rare earths
overseas. Leshan Shenghe Rare Earth Co, a unit of Shenghe
Resources  600392.SS , is the largest shareholder in Greenland
Minerals and Energy  GGG.AX , which is seeking to develop the
Kvanefjeld rare earth project in Greenland, and has a minority
stake in U.S. rare earths miner MP Materials. 
    State-owned CNMC, which has also been linked with
Kvanefjeld, had in 2009 sought to acquire Lynas Corp  LYC.AX ,
the only major rare earths producer outside China, but was
unable to satisfy Australia's foreign investment regulator.

 (Reporting by Tom Daly, editing by David Evans)
 ((tom.daly@thomsonreuters.com; +86 10 5669 2119;))