Shenghe Resources Plans to Transfer 51% Equity in Four Rare Earth Refining and Separation Subsidiaries to China Rare Earth Development

36Kr reports that Shenghe Resources announced plans to collaborate on equity with China Rare Earth Group Industrial Development Co., Ltd. The company intends to transfer 51% equity stakes in four subsidiaries—Leshan Shenghe (after stripping non-rare earth refining and separation operations), Quannan Xin Resource, Jiangyin Jiahua, and Zibo Jiahua—to China Rare Earth Development. The assessed pre-valuation of the target companies totals between 3.25 billion and 3.55 billion yuan, with an expected transaction price ranging from 1.6575 billion to 1.8105 billion yuan. Upon completion of the deal, the four target companies will no longer be included in consolidated financial statements, and accounting for these investments will shift from the cost method to the equity method. This equity cooperation is limited to rare earth refining and separation operations and does not involve other business segments of the company. China Rare Earth Group possesses resource and industrial advantages; by acquiring a 51% stake in four rare earth refining and separation enterprises through its wholly-owned subsidiary, both parties will achieve equity collaboration in their refining and separation businesses.