Peak signs offtake and cooperation MoU with Shenghe for its Tanzania project

ASX-listed Peak Rare Earths has inked an offtake strategic cooperation memorandum of understanding (MoU) with Singapore-based Shenghe Resources, which could see the Chinese firm take a stake in the Ngualla rare earths project in Tanzania,

As part of the MoU, Shenghe will purchase between 75% and 100% of the proposed production from the Ngualla rare earths project, which could include a high-grade mineral concentrate or a mixed rare earth carbonate.

The offtake will run for an initial seven years, but could be extended by mutual agreement, and will include an arms-length market-based pricing principle based on the value of contained rare earth oxides within the product.

The MoU also includes the potential for technical cooperation on relevant aspects of the Ngualla project, including rare earth mining and beneficiation processes, the potential for Shenghe to acquire a direct stake in the project, and the right to appoint a nonexecutive director to the Peak board, subject to Shenghe maintaining a shareholding of at least 10%.

The two companies would also assess the potential to explore other areas of strategic cooperation outside of the Ngualla project.

“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,” said Peak executive chairperson Russel Scrimshaw.

Peak last year announced that it would undertake an update on its bankable feasibility study (BFS) for the Ngualla-Teesside project to further optimise the integrated Ngualla-Teesside project by expanding production.

The updated study will reflect a nameplate yearly mill throughput of 800 000 t, which would deliver a 28% increase in the production anticipated in an optimised BFS to 624 000 t/y, and an increase in annual neodymium praseodymium (NdPr) production to between 3 000 t and 3 500 t, from the 2 810 t/y NdPr considered in the optimised BFS.

Under the revised timeline a final investment decision is targeted before the end of December 2022.

SOURCE: MINING WEEKLY