China Rare Earth Group Eyes Indirect Stake in US-Based MP Materials

Key Facts

1State-owned China Rare Earth Group is in talks to take a controlling stake in Shenghe Resources.

2Shenghe holds a 3.11% stake in US-based MP Materials, raising potential regulatory alarms in Washington.

Amid an intensifying resource war over critical minerals, China is moving to further consolidate its dominance through strategic acquisitions. State-owned China Rare Earth Group is reportedly in talks to take a controlling stake in Shenghe Resources. This move is significant as Shenghe holds a 3.11% stake in the US-based producer MP Materials, potentially granting a Chinese state entity indirect influence over a primary source of rare earths used in US defense and technology sectors.

The potential takeover raises regulatory alarms in Washington regarding the security of supply chains for electric vehicles and military hardware. According to market data, shares of MP Materials (MP) closed at $49.38 on September 17, 2026, fluctuating between a day high of $50.51 and a low of $49.22. The consolidation of mining and refining capabilities under a single state-owned group reflects Beijing's broader strategy to maintain leverage over critical materials that have seen restricted access in recent years.

Traders should watch for potential intervention from US regulators, as any increase in Chinese state influence over domestic mineral assets often triggers national security reviews. On the economic front, recent data from China showed industrial production grew by 5.2% as of September 15, 2026, exceeding forecasts and signaling robust demand for industrial inputs. With MP priced at $49.38 (close September 17, 2026), the stock remains highly sensitive to geopolitical developments and trade policy shifts between Washington and Beijing.