Peak Rare Earths Advances Ngualla Project Amid Rising Rare Earth Prices

Strategic Partnership and Regulatory Landscape

During the March 2025 quarter, Peak Rare Earths Limited (ASX: PEK) made notable progress in its partnership discussions with Shenghe Resources Holding Co., Ltd. The company’s executive team engaged directly with Shenghe’s leadership in Chengdu to navigate the implications of newly proposed rare earth regulations by China’s Ministry of Industry and Information Technology (MIIT). These draft regulations, if enacted, would centralize rare earth mining and processing within state-owned entities, potentially reshaping global supply chains and elevating the strategic value of projects like Ngualla.

Peak and Shenghe are working towards finalizing a transaction structure that would facilitate Shenghe’s investment and development involvement in the Ngualla Rare Earth Project, aiming to deliver a mutually beneficial outcome for shareholders. This collaboration is critical as the rare earth sector faces increased regulatory scrutiny and supply-side discipline.

Capital Raising and Financial Position

Following a successful A$4.8 million placement in December 2024, Peak completed a further A$3.7 million capital raise in January 2025, comprising a placement to Shenghe Singapore (~A$1.7 million) and an oversubscribed Shareholder Purchase Plan (SPP) of A$2 million. Post-raising, Shenghe Singapore’s stake in Peak increased to approximately 19.9%, underscoring its strategic commitment.

The company ended the quarter with a healthy cash balance of A$6.2 million, supporting ongoing development activities and corporate operations. Exploration and evaluation expenditure totaled A$1.3 million, focused on engineering studies, testwork, and geological evaluation at Ngualla.

Asset Rationalization and Land Compensation Progress

Peak continued negotiations to divest its non-core 49-acre Teesside site in the UK, with hopes of a near-term sale to bolster funding for the Ngualla Project and working capital. Meanwhile, in Tanzania, the government’s Chief Valuer approved the land compensation schedule following the completion of a Resettlement Action Plan. This schedule includes upfront payments to 193 Project Affected Persons and ongoing annual payments to the Ngwala Village, with payments set to commence in May 2025.

Peak has also implemented community support initiatives, including assistance with national ID and bank account setups, alongside financial literacy programs to empower local stakeholders.

Community Development Initiatives

Reflecting its commitment to social responsibility, Peak completed the construction of two classrooms and a teacher’s office for the new Ngwala High School, fully equipped with electricity and furnishings. The company also nearly completed the community’s first police station, with final installations underway.

Additionally, a paramedic service was established at the remote Ngualla Camp, providing emergency medical support to both project personnel and local communities. This service enhances healthcare capacity in a region over 170 km from the nearest major town.

Governance and Investor Engagement

Board changes included the resignation of Ian Chambers, former Chair of the Audit, Risk and Sustainability Committee, with Hannah Badenach appointed as his successor. The Tanzanian government nominated Evelyne Mugasha, Chief Government Valuer, to the board of Mamba Minerals, Peak’s 84%-owned subsidiary, bringing valuable expertise to the land compensation process.

Peak and Mamba Minerals also actively engaged with investors and strategic partners at the 121 Mining Investment Cape Town and Mining Indaba conferences, reinforcing their market presence and strategic positioning.

Market Dynamics and Pricing

Global electric vehicle (EV) adoption continues to accelerate, with EVs accounting for approximately 30.7% of global vehicle sales in February 2025. This surge drives incremental demand for neodymium-praseodymium (NdPr) oxide, a critical rare earth element. Peak’s Ngualla Project is well positioned to meet this growing demand.

Rare earth prices strengthened significantly over the quarter, with NdPr oxide prices rising from US$54.6/kg to US$61.0/kg, a 25% increase year-on-year. Factors supporting this price appreciation include robust demand, anticipated supply constraints under new Chinese regulations, and geopolitical risks affecting supply chains.