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.

Shenghe Resources Expands Rare Earth Capacity with Jiahua Acquisitions

Shenghe Resources

Chinese rare earth giant Shenghe Resources has announced its acquisition of significant stakes in rare earth separation plants Jiangyin Jiahua and Zibo Jiahua, aiming to boost its production capacity and strengthen market competitiveness. The move underscores Shenghe's strategic commitment to enhancing its global footprint and securing supply chains amid fluctuating market conditions.

Strategic Acquisitions in Rare Earth Separation

Through its wholly-owned subsidiary, Ganzhou Chenguang Rare Earth New Materials, Shenghe Resources will acquire an 86% stake in Jiangyin Jiahua for 182.71 million yuan ($25.61 million) and 95% of Zibo Jiahua for 29.38 million yuan from Canadian-based Neo Performance Materials. Shenghe will gain full ownership of Zibo Jiahua by purchasing the remaining 5% stake from Zibo Shijia Industrial and Trading.

• Jiangyin Jiahua, based in Jiangsu, has an annual separation capacity of 3,800 tonnes of high-purity rare earth oxide (REO).
• Zibo Jiahua, located in Shandong, can process 5,500 tonnes per year of bastnaesite rare earth ores.

Zibo Jiahua has also invested 500 million yuan to construct an 8,000 t/yr plant for high-performance rare earth catalytic materials, vital for reducing emissions from internal combustion engines. Upon completion, this facility is expected to dominate 30-35% of the global market for catalytic materials.

A Focus on Global Expansion

Shenghe Resources continues to expand its international presence:

1. Ngualla Project: Shenghe increased its stake in the Tanzanian rare earth mining company Ngualla Group UK Limited, co-owned by Peak Rare Earths (PRR), to develop the Ngualla project.
2. Vital Metals: Shenghe acquired an 18.2% stake in the Australian rare earth exploration firm Vital Metals, which holds assets like the Nechalacho mine in Canada and the Wigu Hill deposit in Tanzania.
3. Vietnam Rare Earth Partnership: Shenghe's subsidiary reached an agreement with Blackstone Minerals to establish a fully-integrated rare earth value chain in Vietnam.

Market Challenges and Financial Outlook

Despite aggressive expansion, Shenghe expects a net loss of 48-72 million yuan for the first half of 2024, citing reduced sales prices and falling gross profit margins. This contrasts sharply with the company’s 83.97 million yuan net profit in the same period last year. The drop is attributed to the slump in rare earth and zirconium-titanium prices and increased raw material costs.

Shenghe remains optimistic, highlighting firm downstream demand and increased output of rare earth oxides, salts, and metals in 2023. These expansions position Shenghe as a key player in securing a resilient and diversified rare earth supply chain.

China’s Shenghe Resources Acquires Jiahua Plants to Boost Rare Earth Production Capacity

In a strategic move to enhance its market presence, Shenghe Resources, a leading Chinese rare earth producer, announced its acquisition of significant stakes in Jiangyin Jiahua and Zibo Jiahua, two major rare earth separation plants. The acquisition, made through Shenghe’s wholly-owned subsidiary, Ganzhou Chenguang Rare Earth New Materials, is expected to bolster Shenghe's production capacity of rare earth oxides (REO) and improve its competitiveness in the global market.

Ganzhou Chenguang will purchase an 86 percent stake in Jiangyin Jiahua for 182.71 million yuan ($25.61 million) and a 95 percent stake in Zibo Jiahua for 29.38 million yuan ($4.11 million) from Toronto-based Neo Performance Materials. Following the transaction, Ganzhou Chenguang will fully own Zibo Jiahua after acquiring the remaining 5 percent stake from Zibo Shijia Industrial and Trading.

These acquisitions will significantly increase Shenghe Resources’ rare earth separation output. Jiangyin Jiahua, based in Jiangsu, specializes in the production of high-purity rare earth oxide and co-sediment products, with a current separation capacity of 3,800 tons per year of REO. Meanwhile, Zibo Jiahua, located in Shandong, boasts an output capacity of 5,500 tons per year for bastnaesite rare earth ores. Zibo Jiahua recently halted its light rare earth separation operations to optimize capital return, reduce earnings volatility, and mitigate concentration risk within China.

Furthermore, Zibo Jiahua has invested 500 million yuan to construct an 8,000 tons per year plant for producing high-performance rare earth catalytic materials used in exhaust catalysts to reduce emissions from internal combustion engines. If this plant reaches full operational capacity, Zibo Jiahua will become the largest producer of catalytic materials in China and globally, commanding 30-35 percent of the world market.

Shenghe Resources has also been actively pursuing global expansion to secure resources and enhance its supply chain resilience. The company recently announced plans to acquire an additional 50 percent interest in the Tanzanian rare earth mining company Ngualla Group UK Limited, in partnership with Australian firm Peak Rare Earths. Shenghe has also expanded its influence in Australia, acquiring an 18.2 percent stake in Vital Metal, an Australian rare earth exploration firm, and has reached a preliminary agreement with Blackstone Minerals to build an integrated rare earth value chain in Vietnam.

Despite these expansions, Shenghe Resources has forecasted a net loss of 48-72 million yuan in the first half of 2024, attributing the downturn to declining prices of rare earth and zirconium-titanium products, alongside increased costs of raw materials such as imported ore concentrates.

Shenghe Resources Acquires Significant Interest in Ngualla Rare Earth Project

Chinese rare earth producer Shenghe Resources is set to acquire an additional 50% interest in the Tanzanian rare earth mining company Ngualla Group UK Limited (NGUK), aiming to further develop the Ngualla project in Tanzania. This acquisition, valued at A$96 million (approximately $63.38 million), will enhance Shenghe's cooperation with Australian mining company Peak Rare Earth (PRE), which currently owns NGUK and holds an 84% stake in the Ngualla project.

This strategic move will significantly increase Shenghe's equity in the Ngualla project, accelerating its development and anticipated start-up. Upon the project's commencement of commercial production, Shenghe will be entitled to 55% of net profits or losses after taxes within the first five years, due to its technical expertise and financial contributions.

Shenghe had previously acquired a 19.9% stake in PRE in early 2022, becoming its largest shareholder. In August 2023, Shenghe and PRE signed a binding offtake agreement, securing Shenghe's access to 100% of the rare earth concentrate or at least 50% of intermediate and final rare earth products from Ngualla.

Construction of the Ngualla project began at the end of May, with completion expected by early 2026. The project is designed to produce 37,200 tons per year of rare earth oxide equivalent from 800,000 tons of processed rare earth ores annually. The Ngualla site boasts rare earth resources of 4.61 million tons of rare earth oxide (REO) and reserves of 887,000 tons of REO, with an average grade of 4.8% and a praseodymium-neodymium oxide content of 21.26%.

Shenghe has been actively expanding its global resource base to enhance its supply chains and profitability. The company recently acquired an 18.2% stake in Australian rare earth exploration firm Vital Metal, which operates the Nechalacho bastnaesite mine in Canada and the Wigu Hill deposit in Tanzania. Additionally, Shenghe's holding company, Vietnam Rare Earth, has reached a preliminary agreement with Australian developer Blackstone Minerals to establish a fully-integrated rare earth value chain in Vietnam.

Ex-China Rare Earth Demand to Stay Weak Amid Economic Headwinds and EV Industry Struggles

China Rare Earth

Global demand for rare earth elements (REEs) outside of China is expected to remain subdued in the coming months, as macroeconomic challenges and sluggish industrial activity continue to weigh on end-user sectors. The rare earth market, which plays a crucial role in electric vehicles (EVs), renewable energy, and high-tech manufacturing, has seen only modest demand growth in 2024, with contract negotiations for 2025 suggesting little change ahead.

Muted Demand Growth for Rare Earths in 2025

Market sources across the Atlantic region and Japan report that rare earth consumption has remained steady but unimpressive, with purchasing volumes under discussion for 2025 aligning closely with 2024 levels. Industries that rely on rare earths—including catalysts, phosphors, ceramics, and glassmaking—are waiting for an industrial revival to drive greater demand.

While the automotive magnetics sector has shown signs of recovery, the broader ex-China automotive industry continues to struggle. The weak performance of EV manufacturers outside of China has been a key factor limiting rare earth demand, particularly for neodymium (Nd), praseodymium (Pr), and dysprosium (Dy), which are essential in permanent magnets used in EV motors.

"We don’t see much change in demand next year," said a market participant. "We are expecting similar volumes under supply contracts for most industries and are actively seeking new applications for rare earth materials to offset the weak market conditions."

Inventory Caution Amid Geopolitical and Shipping Disruptions

Another major concern heading into 2025 is inventory management, as companies work to maintain stable supply chains while avoiding overstocking. With high interest rates and tight margins, international trading firms remain cautious about restocking and taking on new commitments.

"We are still being careful about restocking," said a trader. "It looks like rare earth prices might stay low next year, so the margins are narrow."

Further complicating supply chains, shipping disruptions in the Red Sea have extended lead times for Chinese rare earth shipments to up to 12 weeks this year. While container freight rates have softened since their summer peak, they started rising again in late 2024 as businesses rushed to complete shipments ahead of a potential strike by the International Longshoremen’s Association (ILA) in North America.

US Tariffs on Chinese Magnets Could Reshape Market

Looking further ahead, the US' planned 25% tariff on Chinese permanent magnets, set to take effect in 2026, is another factor that could reshape the rare earth market. The move has been welcomed by some companies as a way to level the playing field and support new US-based permanent magnet production, but its actual impact remains uncertain.

The US magnetics industry has taken small steps toward securing domestic supply chains, occasionally sourcing ferro-gadolinium and ferro-dysprosium from the spot market. However, with domestic magnet production still in its early stages, US demand for Chinese rare earth oxides, metals, and alloys remains high. Even when the tariff is implemented, industry experts warn that it may not be enough to significantly reduce reliance on Chinese magnets, as non-China-produced magnets typically command a price premium well above 25%.

Potential Trade War Escalation Under Trump Administration

Adding further uncertainty is president-elect Donald Trump’s proposed 60-200% tariffs on all Chinese imports, which could be implemented after his inauguration in January. While most analysts expect rare earth materials to be excluded due to US dependence on China, heightened geopolitical tensions and the increasing focus on critical minerals could lead to unexpected policy shifts.

As 2025 approaches, market participants remain watchful of potential developments in US-China trade relations, as any changes could significantly impact global rare earth supply and pricing dynamics.

Conclusion

Despite some recovery in automotive magnetics, overall rare earth demand outside China is expected to remain weak in 2025 due to macroeconomic headwinds, EV industry struggles, and cautious inventory management. The US' planned tariffs on Chinese magnets could reshape long-term supply chains but are unlikely to reduce reliance on Chinese rare earths in the near term. Meanwhile, trade policy uncertainties under the Trump administration add another layer of unpredictability for rare earth markets going forward.

Baogang rare earth alloy steel tender secures world’s biggest hydropower project

Baogang rare earth

Baogang rare earth alloy steel tender underscores China’s push into strategic infrastructure. The steelmaker will supply 62,000t for the Yarlung Tsangpo hydropower dam. As a result, Baogang rare earth alloy steel tender signals rising demand for special steels and rare earth inputs.

Scope and investment for the Yarlung Tsangpo dam

China began constructing the world’s biggest hydropower dam on 19 July. The project sits in Tibet on the Yarlung Tsangpo river. The investment totals Yn1.2 trillion, the tender announcement said. Meanwhile, industry groups expect 4–6mn t of special steel demand. That far exceeds prior hydropower builds in China.

Baogang rare earth alloy steel tender aligns with upstream strengths

Baogang United Steel will ship rare earth alloy steels for core structures. The company leads plate supply across northwest China. It targets 2025 output of 15.64mn t of crude steel. It also plans 390,000t of rare earth concentrate and 650,000t of fluorite concentrate. Baogang owns the Bayan Obo rare earth mine in Inner Mongolia. Northern Rare Earth purchases all of Baogang’s concentrate. Baogang holds 37% of NRE, while Baotou Steel is the largest shareholder in both firms.

Pipeline of national projects reinforces demand

Baogang has supplied steel to major national projects in Tibet. These included the Qinghai-Xizang and Lhasa-Nyingchi railways. It also delivered to the Lalo water conservancy hub. Therefore, the new hydropower award should lift sales and earnings. The firm reported Yn15.433bn in first-quarter revenue, down 13% year on year. Net profit fell 29.33% in the same period. However, the tender adds volume visibility as construction ramps.

The Metalnomist Commentary

This award tightens the link between rare earth mining and advanced steel demand. Expect stronger pricing power for alloy plate with rare earth additions as project steel calls peak. Watch Northern Rare Earth flows from Bayan Obo for signals on alloying element availability and costs.

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.

VHM Delays Goschen Rare Earth Project Amid Industry Flux

VHM

Australian Rare Earth Supply Growth Slows with Six-Month Project Delay

VHM has postponed the launch of its Goschen rare earth project in Victoria, pushing back operations by six months. This delay marks the second time the company has adjusted its timeline, now planning to begin production in late 2026 instead of early 2026. The Goschen project aims to produce 4,300 tonnes per year (t/yr) of rare earth mineral concentrate, processing 1.5 million tonnes of ore annually.

Despite the delay, VHM remains committed to scaling operations. After maintaining initial output for three years, the company will more than double production to 9,000 t/yr by the end of 2029. These figures underline VHM’s long-term confidence in rare earth demand, even as market conditions remain volatile. The company has already secured offtake agreements covering 6,400 t/yr, starting once full production is reached in 2029.

Government Support Drives Broader Sector Momentum

Australia continues to prioritize rare earth development as part of its critical minerals strategy. The federal government recently injected A$200 million into Arafura Rare Earths’ Nolans project in the Northern Territory. Additionally, Iluka Resources secured a A$400 million loan for its Eneabba refinery in Western Australia, reflecting growing institutional backing for domestic refining capabilities.

These initiatives come as global interest in rare earths remains high, despite price volatility. China's FOB price for praseodymium-neodymium oxide climbed from $55,550/t in February 2024 to $60,000/t in February 2025. However, it remains far below the March 2022 peak of $174,750/t, underscoring the impact of global oversupply.

Market Headwinds Persist, But Long-Term Demand Remains

While the rare earth market grapples with short-term pricing challenges, long-term fundamentals remain strong. The increasing electrification of transport and demand for wind turbines continue to support rare earth consumption forecasts. VHM’s delay may reflect cautious capital deployment, but its ramp-up plan and offtake agreements suggest confidence in future market stability.

As Australia expands its position as a reliable rare earths supplier, the Goschen project will likely play a crucial role in strengthening the country's critical mineral value chain.