Shenghe Resources Acquires 100% Stake in Peak Rare Earth for Overseas Expansion

Peak Rare Earth

Shenghe Resources completed a strategic Shenghe Peak Rare Earth acquisition worth A$158 million ($729.86 million) to secure complete ownership of the Australian mining company and its Tanzanian assets. The Chinese rare earth producer's subsidiary Ganzhou Chenguang executed the purchase to accelerate overseas rare earth resource development beyond China's domestic market. This Shenghe Peak Rare Earth acquisition builds upon Shenghe's existing 19.9% shareholding established in early 2022 and strengthens China's global rare earth supply chain control.

Ngualla Project Anchors Tanzania Rare Earth Strategy

The Ngualla project represents the centerpiece of the Shenghe Peak Rare Earth acquisition, featuring 4.61 million tonnes of rare earth oxide (REO) resources and 887,000 tonnes of REO reserves. Peak Rare Earth holds an 84% stake in the Tanzanian project, with the government retaining the remaining ownership share. Meanwhile, the project maintains an impressive average grade of 4.8% and praseodymium-neodymium oxide content of 21.26%.

Construction completion and operational startup are scheduled for early 2026, with initial production targeting 18,000 tonnes REO of rare earth concentrate annually. This output will yield approximately 4,000 tonnes of praseodymium-neodymium oxide, critical materials for permanent magnet manufacturing. Therefore, the Ngualla project will significantly boost Shenghe's production capacity for high-value magnetic rare earth elements.

Heavy Mineral Sands Portfolio Expands Through Strategic Acquisitions

Shenghe diversified its Tanzanian operations through the Fungoni project, which commenced heavy mineral sands production in late 2024. The first production line achieved operational status, with additional lines expected online before September to reach 100,000 tonnes per year total capacity. As a result, Shenghe secured both rare earth and heavy mineral sands resources within Tanzania's mineral-rich regions.

The company acquired complete ownership of Strandline Resources UK Limited (SRUL) in May 2024, gaining control of the Fungoni project's operating subsidiary Tanzanian Nyati Mineral Sands. Furthermore, Shenghe purchased a 65% stake in Jiacheng Mining (Shanghai) and 100% of African Resources Company, adding 27 million tonnes of heavy mineral sands resources. However, these acquisitions require integration with existing operations to maximize synergies across the portfolio.

Shenghe's financial performance reflected these strategic investments, with revenues reaching 2.99 billion yuan ($415 million) in the first quarter, representing 3.66% year-over-year growth. Net profit surged to 168.22 million yuan from a previous year loss of 215.57 million yuan. Consequently, rising rare earth prices, tighter spot supplies, and increased sales volumes drove this remarkable financial turnaround for the expanding company.

The Metalnomist Commentary

Shenghe's aggressive overseas acquisition strategy demonstrates China's determination to secure critical rare earth supply chains beyond domestic borders, particularly in Africa's mineral-rich regions. The Peak Rare Earth acquisition provides strategic access to high-grade praseodymium-neodymium resources essential for permanent magnet production, while the Tanzanian portfolio diversification reduces supply concentration risks through geographic and commodity expansion.