News: PEK UPDATE 1-Peak Rare Earths inks Tanzania supply deal with China's Shenghe

(Recasts first paragraph, adds details and quotes)

Aug 9 (Reuters) - Australia's Peak Rare Earths Ltd (PEK) said on Wednesday it will supply rare-earths concentrate from its Ngualla project in Tanzania to the Singapore-based unit of China's Shenghe Resources 600392.SS .

The agreement will be for an initial term of seven years and Peak will provide 100% of rare-earths concentrate from Ngualla to Shenghe Singapore, which holds an about 19.8% stake in the Australia-listed rare earths firm.

The companies also signed a memorandum of understanding (MoU) to negotiate a fixed price for the supply deal while working on a funding solution for the project.

The Ngualla project is expected to begin construction by the end of May 2024, with completion and development eyed in early 2026.

"Peak and Shenghe have also agreed to co-operate around opportunities to further optimise the Ngualla project with respect to capital expenditure, operating costs and concentrate grade and recoveries," Peak Rare Earths said in a statement.

The MoU has an option for Shenghe to buy a non-controlling stake in the project to substantially reduce Peak's funding requirements.

"Shenghe regards the Ngualla project as the premier undeveloped rare earth project in the world," said Huang Ping, deputy executive chairman of Shenghe Resources.

Shenghe Resources is the largest importer of rare-earths in China.