- Shares in RareX (REE) have jumped more than 18 per cent in early trading today after the company signed an MOU with Shenghe Resources
- The two companies will form a joint venture to source rare earth concentrates from outside of China for processing at Shenghe’s refining assets
- RareX will hold a 49 per cent interest in the joint venture while Shenghe will own the remaining 51 per cent
- The MOU also outlines the potential for an investment by Shenghe in RareX’s flagship Cummins Range Rare Earths Project
- RareX is up 18.18 per cent to $0.13 per share
Shares in RareX (REE) have jumped more than 18 per cent in early trading today after the company signed an MOU with Shenghe Resources.
Listed on the Shanghai Stock Exchange, the $6 billion rare earth producer will collaborate with RareX to form a jointly-owned rare earths trading company. 49 per cent owned by RareX and 51 per cent owned by Shenghe, the company will focus on sourcing rare earths concentrates from outside of China for processing at Shanghe’s existing and proposed refining assets, both within China and around the world.
Subject to the necessary regulations, Shenghe will also have the potential to invest in RareX’s flagship Cummins Range Rare Earths Project in Western Australia, possibly securing exclusive marketing rights to any rare earths concentrates produced there in the process.
“This is an exciting development for RareX and our shareholders which opens up a number of significant growth pathways,” said Jeremy Robinson, Managing Director of RareX.
“We look forward to progressing discussions with Shenghe over the coming months and to working collaboratively for the benefit of both companies,” he added.
Shenghe has been busily working to bolster its operations in the rare earths sector, and already has an 8 per cent interest in NYSE-listed MP Materials (MP), which has a market capitalisation of around $6.29 billion, as well as a 9.7 per cent stake in ASX-listed Greenland Minerals (GGG), which owns the large-scale Kvanefjeld Project.
“We are very interested and confident in the opportunity to work with RareX as it fits well with our global strategy,” said Huang Ping, CEO of Shenghe Resources.
RareX is up 18.18 per cent to $0.13 per share at 10:44am AEDT.