China Rare Earth Holdings Limited Plans to Purchase Tungsten Bars for HKD 150 Million

China Rare Earth Holdings Limited (00769.HK) issued an announcement stating that on May 28, 2025, the seller, Zhongjing International Limited, the buyer, Wealthy Energy Limited (a wholly-owned subsidiary of the company), and the company entered into an agreement. Under this agreement, the buyer has conditionally agreed to purchase, and the seller has agreed to sell, tungsten bars for a total consideration of HKD 150 million, to be paid upon completion through the issuance and allotment of 400 million consideration shares at an issue price of HKD 0.375 per share. The consideration shares will be issued under a general mandate. The assets to be acquired are 1,600 kg of tungsten bars with a purity of no less than 99.995%.

The announcement indicates that this agreement is subject to and conditional upon the following:

(a) The buyer is satisfied with the due diligence results regarding the tungsten bars;

(b) The buyer has obtained a valuation report from an independent valuer stating that the valuation of the tungsten bars is not less than HKD 150,000,000;

(c) The buyer has received documentation confirming that the tungsten bars have been shipped from the seller’s warehouse and successfully delivered to the buyer’s designated warehouse;

(d) The agreement remains in effect;

(e) The Stock Exchange has approved the listing and trading of the consideration shares, and such approval has not been revoked prior to the issuance and allotment of the consideration shares;

(f) The warranties made by the seller and all other terms of the agreement remain true, accurate, and free from material misrepresentation, with no significant breach occurring as of the completion date;

(g) The seller, buyer, and the company have obtained all necessary consents, permits, and approvals required to execute and implement the agreement and the proposed transaction, and such remain fully effective.

If any of the above conditions are not met by June 15, 2025, or a later date mutually agreed upon in writing by the parties to the agreement, the seller, buyer, and the company shall have no obligation to proceed with the tungsten bar transaction, and the agreement will automatically terminate and cease to have effect.

Tungsten is a vital rare metal widely used in advanced industries such as semiconductors, aerospace, and renewable energy. Tungsten often coexists with rare earth elements in mineral deposits, and both are considered strategic materials. With rapid technological advancements, particularly in the semiconductor sector, the demand for high-purity tungsten products is significantly increasing.

The board believes that the market demand for tungsten will continue to grow strongly in the near future. By engaging in tungsten sales, the company can leverage its existing expertise in the rare earth sector to build a more persified portfolio of critical minerals, thereby enhancing its resilience in the evolving global supply chain. The acquisition of ultra-high-purity tungsten presents a unique opportunity for the company to expand its footprint in the critical minerals sector, support the group’s long-term growth, and establish strategic partnerships, creating sustainable value for shareholders.

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