China Rare Earth Group is pursuing talks to obtain control of Shenghe Resources. If completed, control of a 3% stake in MP Materials, which is linked to some of Shenghe's overseas interests, could change hands.
China Rare Earth Group is negotiating to obtain control of Shenghe Resources, people familiar with the matter said. The talks have continued since the beginning of this year, and are seen as reflecting an intent to strengthen Beijing's control over the rare earths industry.
If the transaction is completed, control of interests in overseas assets held by Shenghe Resources could change hands. Specifically, the transaction is said to involve a 3% stake in U.S. rare earths company MP Materials. The U.S. Department of Defense is MP Materials' largest shareholder.
Shenghe Resources acquired Australia's Peak Rare Earths last year, raising concerns that a transaction with a major Chinese government-affiliated rare earths company could also affect overseas assets. People familiar with the matter said the outcome of the transaction and its specific terms remain unclear.
China Rare Earth Group was established in 2021 through the restructuring of five state-owned companies and is considered the country's largest supplier of heavy rare earth elements.
China Rare Earth Group, Shenghe Resources and the Ministry of Commerce did not respond to requests for comment on the matter.