(Yicai Global) Sept. 1 -- Chinese mining services firm Sinomine Resource Group and Ningbo Yunsheng, a leading supplier of rare earth permanent magnetic materials, have agreed to set up a joint venture to acquire the mining rights to rare earth minerals in Africa.

Sinomine will own 55 percent of the JV, which will have a registered capital of CNY55 million (USD8 million), and Yunsheng will own the rest, the partners said in separate statements late yesterday.  The new venture will acquire rare earth projects and set up local project companies to make investments, explore and develop mines, they said.

Beijing-based Sinomine will be the preferred exploration company and have preferential rights to any minerals extracted other than rare earths, for which Yusheng will have first refusal.

The tie-up can give play to Sinomine's advantages in mineral exploration resources and Yunsheng's business capabilities in the field of rare earth applications, while also ensuring the supply of materials to the latter, they said, without saying whether the JV already has acquisition targets in mind.

Sinomine does business in more than 40 countries and regions, and Ningbo-based Yunsheng is one of the world's biggest producers of rare earth permanent magnetic materials by annual capacity, according to their websites.

Shares of Sinomine [SHE: 002738] closed down 1.1 percent at CNY93.71 (USD13.58) today, after gaining as much as 2.7 percent in morning trading. Yunsheng [SHA: 600366] inched up 0.5 percent at CNY11.96 (USD1.73).

Editor: Futura Costaglione