RareX inks MoU with US$4.6B rare earths producers Shenghe Resources

Image Credit: Rare Earths

Rare earths exploration and development company RareX Limited (ASX:REE) announced Thursday that it has executed a non-binding Memorandum of Understanding with global rare earths producer, Shenghe Resources.

Shenghe is a Shanghai Stock Exchange-listed producer of rare earths, zirconium and titanium with a market capitalisation of nearly US$4.6 billion. The leading rare earths producer is also vertically integrated through the rare earths value chain from ore mining, processing to concentrate production, refining and separating to high-purity rare earths oxides, metals and alloys, and the production of a range of downstream rare earths products.

The terms of the MoU will provide a framework to establish a jointly-owned alliance named Rare Earths Trading Company (“RET Co”) to source rare earths concentrates globally, excluding from within China.

Under the MoU, initial equity ownership will follow a 51%-49% scheme Shenghe owning the greater part of the deal.

Commenting on the agreement, RareX Managing Director Jeremy Robinson said: “We are absolutely delighted to be moving forward towards securing an alliance with a company of the size and quality of Shenghe in the global rare earths industry.

“This is an exciting development for RareX and our shareholders which opens up a number of significant growth pathways.”

“We are very interested and confident in the opportunity to work with RareX as it fits well with our global strategy. We will work collaboratively with RareX as part of the alliance to assist and support potential RET Co.’s business activities.”