Australia-based Peak Rare Earths has executed a binding offtake agreement with Shenghe Resources Singapore for the Ngualla rare earth project in southern Tanzania.
Shenghe Resources Singapore is a wholly owned subsidiary of Shenghe, a China-based rare earths company with a market capitalisation of around $3.1bn.
Peak Rare Earths also signed a memorandum of understanding (MOU) with Shenghe for cooperation on engineering, procurement and construction (EPC) and project funding.
A final investment decision (FID) and the start of construction are expected by the end of May 2024, with the construction and development expected to be completed by early 2026.
The FEED is anticipated by the end of November 2023 and a decision on an EPC or EPCM execution model by the end of December.
Peak Rare Earths executive chairman Russell Scrimshaw said: “We are delighted to be extending our strategic cooperation with Shenghe.
“The combination of a binding offtake agreement and a non-binding EPC and funding MOU differentiates Peak from its peers and supports a pathway to a successful project funding solution for the development of the Ngualla Rare Earths Project.”
Under the terms of the offtake agreement, Peak will supply 100% of the rare earth concentrate, at least 50% of any intermediate rare earth products, for the initial seven years.
Pursuant to the non-binding MOU, Shenghe will support an integrated development and funding solution, by arranging and providing a fixed price and turnkey EPC solution.
It will provide the project funding solution, help reduce capital and operating costs, expedite construction and further optimise the Ngualla project.
Shenghe deputy executive chairman Huang Ping said: “Shenghe regards the Ngualla Project as the premier undeveloped rare earth project in the world.
“We are excited to be partnering with Peak, and its Tanzanian entity Mamba Minerals, in the development of this world-class project through the provision of offtake, technical and funding support.”
