(Yicai Global) Feb. 14 -- Chinese mining company Shenghe Resources Holding intends to invest about AUD39.25 million (USD27.9 million) to become the largest shareholder of Australia's Peak Rare Earths which is in the process of gaining resources in Tanzania and the United Kingdom.

Shenghe will offer 99 Australian cents (71 US cents) per share via its Singapore unit to hold 19.9 percent of the Australian miner's equity, the Chengdu-based company said in a statement yesterday. Other shareholders have stakes smaller than 5 percent.

The main asset of Perth-based Peak Rare Earths is the Ngualla rare earth project in Tanzania. The USD200 million project is expected to have an annual capacity of 37,200 tons of rare-earth elements, 45 percent of which are rare earth oxides. The East African country's minerals minister still needs to approve the granting of a special mining license for the project.

Peak Rare Earths' shareholding ratio in the Ngualla project will decline to 84 percent after the license is issued as the Tanzanian government will gain the remaining 16 percent stake that cannot be diluted for free.

The Australian company has other endeavors around the world. It is planning to invest USD165 million to build a rare-earth refinery in Middlesbrough, the UK, to process from 9,900 to 11,600 tons of rare earth elements per year. Peak Rare Earths has already leased a parcel of land for the project for 250 years and secured a construction license.

Shenghe engages in business across the REE industrial chain. Besides its Sichuan province assets, Shenghe is developing multiple rare-earth mines around the world via equity ownership, according to the firm's website.

Shenghe's stock price [SHA: 600392] was 0.7 percent up at CNY17.81 (USD2.80) in the afternoon. But its shares are still 8 percent down in value this year.

Editor: Emmi Laine, Xiao Yi