Shares in Peak Rare Earths Ltd soared 150% to A$0.30 after confirming a proposed A$158 million takeover by Chinese state-owned Shenghe Resources Holding Co Ltd, via its subsidiary Ganzhou Chenguang Rare Earths New Material Co. The acquisition gives Shenghe full control of the Ngualla rare earths project in Tanzania, East Africa.
The share price rally followed a trading halt, during which Shenghe disclosed the deal to its own investors. Peak confirmed the transaction on Thursday, resuming trade on ASX.
Chenguang, which already holds a major shareholding and has binding rights to 100% of future Ngualla production, will pay A$150.5 million, plus a further amount matching proceeds from a proposed A$7.5 million entitlement offer. If fully subscribed, the offer will result in a cash return of A$0.359 per share, representing a 199% premium to Peak’s last close of A$0.12.
Peak’s independent board has endorsed the offer, pending superior alternatives. The agreement follows a re-evaluation of their previous joint venture framework, originally struck in July 2023, amid tightening geopolitical and regulatory scrutiny around Chinese investments in Australian rare earths.
Under the prior structure, Shenghe had committed US$96 million to acquire a 50% interest in Peak’s UK-based subsidiary, Ngualla Group UK (NGUK), which owns a majority stake in Mamba Minerals, developer of the Ngualla project. The Tanzanian government holds a 16% interest in the project, considered one of the world’s highest-grade Neodymium-Praseodymium (NdPr) deposits.
The renewed proposal emerges as Australia assesses policies to secure critical minerals supply chains, including a strategic reserve initiative, and as industry players like Iluka Resources Ltd seek federal support to reduce reliance on Chinese processing capacity.
Shareholder approval will be sought in September, subject to regulatory clearance in China and Tanzania, and Australian court approvals.