(Yicai) May 15 -- Shares of Shenghe Resources Holding rose after the Chinese miner said it plans to fully acquire Australia's Peak Rare Earths to expedite the Ngualla rare earth project in Tanzania and strengthen its growth foundation.

Shenghe [SHA: 600392] jumped 7.2 percent to CNY13.18 (USD1.83) a share as of 2.20 p.m. in Shanghai today, after surging by the daily trading limit of 10 percent at one point.

Shenghe subsidiary Chenguang Rare Earths New Material will buy the stock in Peak Rare Earths it does not own for up to AUD158 million (USD100 million), the Chengdu-based parent company announced yesterday. The unit will acquire all of the target firm's ordinary shares via a negotiated agreement, it added.

In 2022, Shenghe bought a 19.9 percent stake in Peak Rare Earths for almost CNY180 million (USD25 million).

The transaction will facilitate the prompt development of the Ngualla project, further solidify Shenghe's resource foundation for growth, and optimize the company's global business layout, the firm said.

The acquisition consideration is set at AUD150.5 million and can reach AUD158 million with a proposed fundraising of around AUD7.5 million (USD4.8 million) through a share placement.

The transaction is subject to approvals from Chinese regulatory authorities, the Tanzania Fair Competition Commission and Mining Commission, Australian courts, and a Peak Rare Earths shareholders meeting.

Established in 2005, Peak Rare Earths focuses on exploring, developing, and producing rare earth elements, with the Ngualla project as its flagship project. The Perth-based company was valued at between CNY799 million and CNY921 million (USD110.9 million and USD127.8 million) as of Dec. 31, according to a valuation by a third-party organization.

Shenghe's net profit plunged 38 percent to CNY207 million last year from the previous year, according to its annual financial report. Its revenue tumbled 36 percent to CNY11.4 billion (USD1.6 billion).

Editor: Martin Kadiev