Australia's Peak rare Earths company said on Wednesday it would supply all rare earth concentrate from its Ngualla project in Tanzania to the Singapore unit of China's Shenghe Resources, Reuters reported.
The agreement with Shenhe, whose Singapore subsidiary owns about 19.8 per cent of Australian-listed Peak Rare Earths, has an initial term of seven years.
The two companies also signed a Memorandum of Understanding to negotiate a fixed price for the supply agreement while working on a financing solution for the project.
According to a feasibility study published last year, the development cost of the project would be $321 million.
Construction of the Ngualla project is expected to begin in late May 2024, with completion expected in early 2026.
"Peak Rare Earths and Shenghe Resources have also agreed to collaborate on opportunities to further optimise the Ngualla project in terms of capital expenditure, operating costs, concentrate grade and recovery rates," Peak Rare Earths said in a statement.
Under the MOU, Shenghe has the option to purchase a non-controlling stake in the project to significantly reduce Peak's capital needs.
"Shenghe believes the Ngualla project is the world's premier undeveloped rare earth project," said Huang Ping, executive vice-chairman of Shenghe Resources.
Shenghe Resources, China's largest importer of rare earths, told the Shanghai stock exchange that it was committed to ensuring stable supplies and that the deal with Peak would play a positive role in accelerating the development of the Ngualla project.
