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RareX executes MoU with global rare earths producer Shenghe Resources

Australian rare earths exploration and development company RareX Limited entered into a non-binding Memorandum of Understanding (MoU) with the leading global rare earths producer, China-based Shenghe Resources Holdings.

Shenghe, listed on the Shanghai Stock Exchange, has a market capitalization of approximately US$4.6 billion. It is a leading producer of rare earths, zirconium and titanium, and is 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.

Shenghe’s two primary investments outside of China are an 8% interest in MP Materials Corp., which has a market capitalization of approximately US$4.8 billion, and a 9.7% interest in Greenland Minerals, which has a market capitalization of approximately A$380 million.

The terms of the MoU provide a framework for Shenghe and RareX to establish an alliance via the formation of a jointly owned Rare Earths Trading Company (RET Co) to source rare earths concentrates globally (excluding from within China) for processing at Shenghe’s existing and proposed refining assets within China and around the world.

Key MoU terms are:

  • Initial equity ownership structure of RET Co of 51% Shenghe and 49% RareX.

  • Both Shenghe and RareX to support RET Co in its business activities.

  • RET Co to source rare earths concentrates globally (excluding from within China) to supply Shenghe’s existing and proposed rare earth refining operations globally.

  • Subject to applicable laws, regulations and interests of the relevant parties in relevant jurisdictions, Shenghe and RareX to commence commercial discussions towards:

    • Shenghe investing, on commercial terms, in the Cummins Range Rare Earths Project;

    • RET Co being offered exclusive marketing rights, on commercial terms, to any rare earths concentrates produced at the Cummins Range Rare Earths Project; and

    • Joint investment by Shenghe and RareX, on commercial terms, in rare earths refinery assets located outside of China.

  • Shenghe and RareX to progress discussions with respect to RET Co and the proposed alliance with a view to moving towards formal documentation and the execution of a binding Heads of Agreement.

RareX also remains focused on preparing for the upcoming drill program at its 100%-owned Cummins Range Rare Earths Project in the Kimberley region of Western Australia. Work is also progressing on an updated Mineral Resource Estimate, which is on track to be released later this quarter.


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