​​Shenghe's Accelerated Acquisition of Peak: Africa's Rare Earths Become a Battleground​【SMM Analysis】

In September 2025, with the successive approvals from the Fair Competition Commission of Tanzania and the Australian court, Shenghe Resources' acquisition of Australia's Peak Rare Earths Limited was largely finalized. Valued at A$195 million (approximately 917 million yuan), the transaction began with an initial equity investment in 2022 and was completed after more than three years, highlighting the strategic positioning of Chinese enterprises in overseas rare earth resources, particularly rare earth assets in Africa.

Global demand for rare earths continued to grow amid the energy transition and technological advancement, making supply chain diversification a strategic priority for countries. With its abundant rare earth resource reserves and development potential, Africa is attracting the attention of global capital and enterprises.

01 Acquisition Timeline: From Strategic Investment to Full Ownership
The acquisition of Peak Company by Shenghe Resources was a strategically executed step-by-step initiative.

In February 2022, Shenghe Resources, through its wholly-owned Singapore subsidiary, acquired a 19.86% equity stake in Peak Company, becoming a major shareholder of this Australian publicly listed firm. This marked the beginning of Shenghe Resources' strategic positioning in Tanzania's Ngualla rare earth project.

On May 14, 2025, the board of Shenghe Resources reviewed and approved the acquisition of 100% equity in Peak Company by its wholly-owned subsidiary, Ganzhou Chenguang Rare Earth New Materials Co., Ltd., for a consideration of A$158 million (approximately 743 million yuan).

In July 2025, the implementing entity for the acquisition was changed to Shenghe Resources (Singapore) Co., Ltd. This adjustment took into account the fact that the Singapore subsidiary already held a portion of Peak Company's shares, making it more conducive for integrated management.

On September 4, 2025, Shenghe Resources announced that, due to the continuous rise in rare earth market prices, the acquisition consideration would be increased by 23.42% from A$158 million to A$195 million. The adjusted price remained within the valuation range previously determined by professional assessments.

From September 16 to 19, 2025, the acquisition received approvals from Peak Company's shareholders' meeting, the Tanzania Fair Competition Commission, and the Australian court, with all preconditions met. The final settlement is expected to be completed in October 2025.

02 African Rare Earth Mines Possess Excellent Endowment and Huge Potential

The primary advantage of African rare earth resources lies in their excellent endowment and huge potential.

High Grade and Complementarity: Discovered rare earth mines in Africa generally exhibit high grades. For instance, the Gakara project in Burundi has a total in-situ rare earth oxide grade as high as 47%–67%, while the Steenkampskraal mine in South Africa has an average grade of 14.4%. This means more valuable rare earth elements can be extracted from the same amount of ore. Furthermore, although light rare earths dominate, projects such as the Lofdal project in Namibia are heavy rare earth projects rich in critical elements like terbium and dysprosium, complementing China's traditional heavy rare earth resources.

Vast Exploration Prospects: Due to low levels of exploration (sub-Saharan Africa once had the second-lowest exploration budget globally), the true extent of Africa's rare earth resources may be far from fully understood. This indicates significant potential for discovering large new deposits in the future.

However, the African rare earth industry as a whole remains in the early stages of development. Apart from a very few producing mines like Gakara, the vast majority of projects (such as Ngualla in Tanzania and Songwe Hill in Malawi) are still in the exploration, feasibility study, or construction phase and have not yet established stable mass production capacity.

03 Overview of Major Rare Earth Projects in Africa
The rare earth resource landscape of the African continent is shaped by several key projects, each at different stages of development.

The Ngualla Project in Tanzania is currently a major focus. It is a core asset of Peak Resources and the target of Shenghe Resources' acquisition. The mine boasts substantial resources, with 18.5 million mt of ore reserves at an average grade of 4.8%, equivalent to 887,000 mt of rare earth oxides (REO). The proportion of Pr-Nd oxide is approximately 21.26%, which are key elements for manufacturing permanent magnet materials. The project is expected to commence production within 24 months after the final investment decision. Shenghe Resources considers the acquisition completion date as the decision point, with the corresponding commissioning time projected to be around Q3 2027.

Beyond Ngualla, other rare earth projects in Africa are also advancing actively. The Makuutu Project in Uganda, developed by Australian company Ionic Rare Earths, previously signed a memorandum of understanding with Aluminum Corp of China to accelerate its development and production.

In South Africa, significant rare earth projects include the Phalaborwa and Steenkampskraal projects. The Lofdal Project in Namibia is one of only two xenotime-type heavy rare earth deposits currently under development globally and has completed production trials.

Overall, by 2029, the African continent is expected to have as many as 8 rare earth projects commence production, which could increase Africa's share in the global rare earth supply chain to 10%.

04 Opportunities and Challenges for Africa's Rare Earth Future

In terms of development conditions, Africa presents a dual scenario of cost advantages and infrastructure shortcomings.

Cost and Policy Attractiveness: In countries such as Kenya, industrial electricity prices can be as low as $0.06 per kWh, and the annual salary for local mining engineers is approximately $25,000, representing significant cost advantages compared to developed countries. Meanwhile, to attract foreign investment, some countries offer preferential policies including corporate income tax reductions, exemptions on import tariffs for equipment, and even allowing 100% foreign ownership.

Infrastructure and Industry Chain Shortcomings: The disadvantages are equally evident. Many mining areas are far from ports, and infrastructure such as roads, electricity, and water supply is severely inadequate, significantly increasing development difficulty and costs. More importantly, the African continent currently has an extreme shortage of smelting and separation capabilities for rare earths, as well as deep processing capacity. The current practice mainly involves exporting rare earth concentrates, resulting in the majority of value-added activities being realized overseas.

From a global perspective, the strategic value of Africa's rare earth resources is increasingly prominent, yet it exists within a complex external environment.

Key to Supply Chain Diversification: Against the backdrop of major global consumers seeking to "de-China" their rare earth supplies, Africa is regarded as a critical region for building a diversified and resilient supply chain. For instance, the US Department of Defense has held discussions with rare earth companies developing projects in Malawi and Burundi, while Japan has participated in the development of a heavy rare earth project in Namibia.

Great Power Competition and Internal Risks: This strategic value also makes the development of Africa's rare earth resources a focal point of great power competition. At the same time, investments face internal risks; for example, Tanzania once ranked second globally in the "Resource Nationalism Index," and the stability of mining policies is a key challenge that investors need to monitor closely.