Shanghai Stock Exchange-listed Shenghe Resources, which is probably better known as a key backer of ASX-listed Greenland Minerals, has signed a non-binding memorandum of understanding that will establish a jointly-owned trading company sourcing rare earths concentrates globally from outside China.

 

Shenghe will initially take a 51% stake in the trading company, which will have exclusive marketing rights on any rare earths concentrates produced at the Cummins Range project in Western Australia.

 

Shenghe has positioned itself to potentially invest in the high-grade Kimberley region deposit, and for the pair to jointly invest in existing or proposed rare earth refineries outside China.

 

RareX managing director Jeremy Robinson said the agreement with Shenghe was an "exciting development" that opened up significant growth pathways.

 

The pair is working towards a binding agreement.

 

Robinson said the deal with Shenghe would not impact work at Cummins Range, where an updated resource estimate is being prepare for release this quarter, while a new drilling program to build on 2020's successful exploration and infill operations of the carbonatite deposit, which delivered thick intersections of total rare earth oxides, including high levels of niobium, neodymium and praseodymium.

 

Over Christmas, RareX paid $50,000 for the option to acquire 12.3% of Canada Rare Earth Corporation from Talaxis Group Holdings.

 

RareX's executive team is comprised largely of ex-Lynas Rare Earths staffers, who helped successfully develop the Mount Weld mine in WA and processing facility in Malaysia.

 

Shares in RareX were last traded at 11c, within a 12-month range of 1-21c.