China Rare Earth Giant Eyes Takeover Of MP Materials' Seventh-Largest Shareholder As Resource War Intensifies
China Rare Earth Group is reportedly in takeover talks with Shenghe Resources, which owns a minority stake in US rare-earth producer MP Materials. The potential deal would tighten Beijing’s influence over rare-earth mining and refining while adding a geopolitical overhang for MP’s ownership structure and supply-chain position.
China Rare Earth Group, a state-owned company, is reportedly discussing a takeover of Shenghe Resources, one of China’s major rare-earth mining and refining companies. Shenghe is also a minority shareholder in MP Materials, a US rare-earth producer, creating a direct link between the proposed transaction and a listed American critical-materials company.
The development comes as control over rare-earth extraction, processing and downstream supply chains becomes a central point of tension between China and the United States. A change in Shenghe’s ownership would shift the relevant shareholder relationship from a private company toward a state-controlled group.
For MP Materials, the mechanism is ownership and strategic alignment: Shenghe’s minority stake could ultimately sit under the control of China Rare Earth Group, potentially increasing Beijing’s influence around a US producer. MP reported $224.4M in revenue for FY 2025, up 10.1% year over year, but also recorded a -38.3% net margin and $-0.50 diluted EPS for that period.
The transaction remains at the talks stage, and the final ownership structure, terms and regulatory response are not established. The key unresolved issue is how any completed deal would affect Shenghe’s stake in MP and the company’s position in the broader US-China rare-earth dispute.
Next steps include the outcome of the reported takeover discussions and any disclosures or regulatory action tied to Shenghe’s ownership of MP Materials. MP’s next financial results will also show whether its revenue trajectory and losses are changing as the geopolitical backdrop develops.
The reported Shenghe talks add geopolitical ownership risk to MP Materials, while its US rare-earth position remains strategically valuable.
The immediate issue for MP is not a change to reported operations but the possibility that a state-owned Chinese group could gain control of a shareholder with a minority stake in the US producer. MP’s $224.4M FY 2025 revenue and 10.1% year-over-year growth show an operating foothold, but the -38.3% net margin and $-0.50 diluted EPS leave the equity exposed if geopolitical risk raises pressure on ownership or supply-chain relationships.
A completed takeover could be blocked, abandoned or structured without changing Shenghe’s MP stake, while MP’s losses could remain the more important driver.
CoverageSource: ZeroHedge · Published here FRI, SEP 18 · 2:40 PM ET · the only report in this recordHow this is decided →
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MP’s US rare-earth production position could become more strategically important as a potential Chinese state takeover heightens attention on critical-materials supply.
The reported talks add a state-ownership and regulatory overhang to MP while FY 2025 still showed a -38.3% net margin and $-0.50 diluted EPS.
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