(Adds details, background) Chinese rare earth producer Shenghe...

(Adds details, background)

Chinese rare earth producer Shenghe Resources Holding Co Ltd 600392.SS said on Friday it planned to buy a 19.9% stake in Australian firm Peak Rare Earths (PEK) to secure more overseas resources amid surging pries.

The stake, which will be sold by Appian Pinnacle Hold Co to Shenghe's Singapore unit, will cost the latter around A$39.25 million ($28 million) or A$0.99 per share, Shenghe said in a filing to the Shanghai Stock Exchange.

Peak Rare Earths operates the Ngualla rare earth project in Tanzania with 18.5 million tonnes of reserves grading at 4.8%.

It also plans to build a rare earth refinery in Tees Valley, Britain with annual rare earth products output aimed at 9,900-11,600 tonnes, according to the filing.

Shenghe Resources said it is focused on rare earths resources markets both at home and abroad. "If the project can be implemented successfully, it will further consolidate the company's foundation and optimize its global business," it said.

Rare earths are a group of 17 minerals used in consumer electronics and military equipment. China is the world's dominant producer of the metals.

Shenghe Resources currently has rare earths separation capacity of around 15,000 tonnes per year and processing capacity of 12,000 tonnes per year. It also has joint stake in rare earths mines in the United State and Greenland.

The Chinese price of praseodymium-neodymium alloy SMM-REM-PNA used to make super strong magnets used in EV motors doubled in 2021 and has already shot up more than 16% so far this year to 1.21 million yuan ($190,296.45) per tonne. ($1 = 1.4019 Australian dollars) ($1 = 6.3585 Chinese yuan renminbi)