Shenghe Resources has agreed to sell 51% stakes in four rare earth smelting and separation subsidiaries to a unit of China Rare Earth Group for an estimated RMB1.66bn–1.81bn, the Shanghai-listed company said on 18 October.
Why China Rare Earth Group Industrial Development Co., Ltd. (China Rare Earth Group) is buying Shenghe Resources rare earth smelting and separation subsidiaries (51% of Leshan Shenghe, Quannan Xinziyuan, Jiangyin Jiahua and Zibo Jiahua)
Shenghe said the equity cooperation is intended to combine the parties' strengths; media coverage said it gives Shenghe more stable access to raw materials while giving the central state-owned group additional processing capacity.
Deal terms and financing
The four targets generated combined revenue of RMB1.76bn and net profit of RMB332m in the first half of 2026, equal to about 20% of Shenghe's revenue and 37% of its net profit. The final price will be set in a supplementary agreement within 15 working days of the appraisal report being filed with state-asset regulators, and payment is split into five instalments, with the final three linked to annual performance commitments.
Regulatory approvals and timing
The transaction, which Shenghe said is neither a related-party deal nor a major asset restructuring, requires approval at a Shenghe shareholder meeting and the filing of the valuation with the competent state-asset supervisor.
Market context
China Rare Earth Group was formed by the state to consolidate the industry. Shenghe has 800m yuan of bank-loan guarantees outstanding for Leshan Shenghe, which will be shared pro rata by the new shareholders after completion.
