ASX-listed rare earth explorer Peak Rare Earths (ASX:PEK) has signed a binding framework agreement with the Government of the United Republic of Tanzania for the Ngualla Rare Earth Project.
The company reports the framework agreement sets out the basis of the Tanzanian government’s agreement for the licensing, development, economic benefit sharing, and the formation of a joint venture (JV) between Peak and the Tanzanian government with respect to the development and operation of the Ngualla Project.
The signing of the framework agreement follows the recent joint establishment between Peak, the Government of Tanzania, and Mamba Minerals Corporation that will own and operate the Ngualla Project, as well as Mamba Refinery which will own and operate any future Tanzanian refining and downstream operations.
Mamba Minerals and Mamba Refinery are both 84% owned by Peak, with the remaining 16% owned by the Government of Tanzania.
The company also reports it has agreed on a series of other documents with the Government of Tanzania contemplated by the framework agreement relating to the formation and management of Mamba Minerals and Mamba Refinery, including memorandum, articles of association, and shareholders agreements.
The Cabinet of Ministers of the Government of Tanzania approved a special mining licence (SML) application for the project in July 2021. Under the framework agreement, the Ngualla Project SML will include the amalgamation of the original SML application area, a prospecting licence, and a recently expired prospecting licence. Peak expects the SML will be formally granted to Mamba Minerals shortly.
“Development of the Ngualla Project will deliver direct foreign investment of more than US$320 million into the Tanzanian economy…”
Commenting on the agreement, Peak Rare Earth’s Executive Chair, Russell Scrimshaw says: “We are delighted to be partnering with the Government of Tanzania in the development of the world-class Ngualla Rare Earth Project.
Development of the Ngualla Project will deliver direct foreign investment of more than US$320 million into the Tanzanian economy, generate hundreds of direct and thousands of indirect jobs for Tanzanians and position Tanzania as one of the major rare earths producers outside of China. It represents an opportunity to deliver multi-generational opportunities to the people of Tanzania.”
Also commenting, Minister for Minerals of the United Republic of Tanzania, the Hon. Dr Dotto Biteko says: “The signing of the Ngualla Rare Earth framework agreement marks a major milestone for the Government of Tanzania and Peak Rare Earths.
The project will position Tanzania as a major player in the international rare earths sector and enables us to play an important role in supporting global decarbonisation initiatives.
It will also support the delivery of employment, investment in social, and regional infrastructure as well as a substantial source of revenue for the government in the form of dividends, royalties, and taxes.”
“The project will position Tanzania as a major player in the international rare earths sector and enables us to play an important role in supporting global decarbonisation initiatives”
The Ngualla Project is one of the largest, ‘highest grade’ and lowest cost neodymium and praseodymium rare earths projects in the world. The project is located about 147km from the city of Mbeya in southern Tanzania and on the edge of the East African Rift Valley.
Peak reports it has the ‘large’ and ‘high-grade’ ore reserves of 18.5 million tonnes grading at 4.8% rare earth oxide (REO) for 887,000 tonnes REO, and a mineral resource of 214.4 million tonnes grading 2.15% REO for 4.61 million tonnes REO.
As part of the staged development, Peak says the project will initially be developed to produce a ‘high-grade’ concentrate for export to third-party refiners. In support of this approach, the company recently signed a non-binding strategic and concentrate offtake memorandum of understanding (MOU) with its largest shareholder, Singapore-based company Shenghe Resources.
With the binding framework agreement signed, Peak reports it is now well positioned to increase its focus on completing key technical and commercial work streams ahead of a targeted final investment decision (FID) by the end of September 2023, with construction in October 2023.
Peak Rare Earths is an ASX-listed exploration company focused on delivering the ‘high-grade’ Ngualla Rare Earth Project in Tanzania. The company also holds an option of a refinery in Teesside in the UK to potentially produce ‘high-grade REE concentrate or mixed REE carbonate.
Images: Peak Rare Earths Ltd
