ETM Declares Shenghe’s 6.5% Stake Top-Up Right Lapsed, Seeks ASX Ruling

Background of the Strategic Partnership

Energy Transition Minerals Limited (ASX, ETM) has announced a significant development regarding its long-standing relationship with Le Shan Shenghe Rare Earth Company Limited (Shenghe). Established in 2016, this partnership was centred on advancing the Kvanefjeld Rare Earth Project in Greenland, with Shenghe holding a 6.5% stake in ETM and enjoying rights to maintain its shareholding through a Top-Up Right.

The original collaboration was designed to foster technical cooperation, optimise project economics, and jointly develop downstream processing and supply chains for rare earth elements. This strategic alliance was a cornerstone of ETM’s approach to becoming a key player in the global rare earths market.

Evolving Relationship and Strategic Realignment

Over time, however, the nature of the relationship has shifted dramatically. Shenghe’s technical involvement ceased as the Kvanefjeld project entered the public hearing phase for its mining licence application. Concurrently, ETM has broadened its corporate strategy, acquiring lithium exploration assets in Canada and Spain, and more recently, the Penouta tin-tantalum-niobium mine and processing plant in Spain.

This diversification signals ETM’s ambition to build a Western-aligned critical minerals platform beyond its Greenland rare earths focus. The company now views the strategic relationship with Shenghe as effectively ended, prompting a reassessment of the rights and waivers granted under the 2016 agreement.

Implications of the Top-Up Right and ASX Waiver

Central to this announcement is ETM’s position that the Top-Up Right granted to Shenghe has lapsed, and consequently, the ASX waiver permitting this right is no longer valid. The Top-Up Right allowed Shenghe to maintain its equity percentage in ETM through future share issues, a privilege contingent on the continuation of the strategic relationship.

ETM plans to engage with the Australian Securities Exchange to seek a formal determination confirming that the strategic relationship has ceased, thereby ending the waiver and the Top-Up Right. Notably, Shenghe may hold a differing view, which could lead to further discussions or disputes.

Looking Ahead

While this development marks a clear turning point for ETM’s shareholder dynamics and project partnerships, the company has committed to keeping the market informed of any significant updates. The outcome of the ASX’s determination will be closely watched by investors, as it could influence ETM’s capital structure and strategic options moving forward.

ETM’s pivot towards a diversified portfolio of critical minerals projects reflects broader industry trends favouring supply chain security and Western alignment in critical resource development. How this shift will impact ETM’s valuation and project timelines remains to be seen.