Peak Rare Earths (ASX: PEK) signed a Memorandum of Understanding (MOU) with Shenghe Resources (SSE: 600392.SS) to support the development of its Ngualla Rare Earth Project in South Western of Tanzania.
The Ngualla Project is one of the largest, highest grade and lowest cost Neodymium and Praseodymium (NdPr) rare earth projects in the world.
It is located approximately 147km from the city of Mbeya in southern Tanzania and on the edge of the East African Rift Valley.
It has large and high-grade Ore Reserves (18.5Mt grading at 4.8% Rare Earth Oxide (REO) for 887kt REO) and Mineral Resources (214.4Mt grading 2.15% REO for 4.61Mt REO).
The Ngualla Project entails the construction of a mine, mill, concentrator, community projects and associated infrastructure.
Construction of the project is expected to cost approximately USD 200 million and create around 600 direct jobs during construction and around 220 direct jobs during operations.
As part of Peak’s integrated strategy, the project will produce a rare earth concentrate grading 45% REO, which will be shipped to its planned rare earths refinery in the Tees Valley in the UK, which will produce NdPr Oxide and other separated rare earth products.
Peack obtained a Special Mining Licence (SML) for the Ngualla Rare Earth Project in July 2021.
Shenghe is a large Chinese rare earth group with operations spanning mining and beneficiation, refining and separation, as well as alloy and metals production.
As part of the MOU, Shenghe will purchase 75%-100% of the production from the Ngualla Project, which may include a high-grade mineral concentrate and/or a mixed-rare earth carbonate.
Commenting on the MOU, the Executive Chairman of Peak, Russell Scrimshaw, said:
“We are delighted to have signed a strategic and marketing MOU with Shenghe. Shenghe is uniquely positioned to assist Peak in the development of the world-class Ngualla Rare Earth Project. We believe that Shenghe’s successful co-operation with MP Materials, provides an excellent roadmap for our offtake, technical and strategic relationship moving forward.”
For his part, the CEO of Shenghe, Wang XIaohui, said:”The signing of this MOU marks an important step in the development of Shenghe’s strategic relationship with Peak and in progressing the Ngualla Rare Earth Project towards development. Shenghe regards the Ngualla Rare Earth Project as the premier undeveloped rare earth project in the world. We are keen to work closely with Peak in developing the project through a combination of offtake, technical and financial support.”
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