MP Materials Stock Falls 4.3%; China Report Reopens the Shenghe Stake Question

China Rare Earth Group is in talks to take a controlling stake in Shenghe Resources, a move that would tighten Beijing's control over rare earth elements. Shenghe holds a 3% stake in U.S. rare earth producer MP Materials, which received a $400 million investment from the Pentagon. MP Materials' shares fell 2.35% to $48.22 after the talks were reported.

China Rare Earth Group is reportedly in talks to acquire Shenghe Resources, which owns about 3% of MP Materials (NYSE: MP). The Pentagon is also a major shareholder in MP Materials. Shares of MP Materials fell 2.35% to $48.22, giving the company a market value of $8.6 billion. The deal could give Beijing indirect ownership of a stake in MP Materials, the only US producer of rare earth elements.

China Rare Earth Group is discussing the acquisition of Shenghe Resources, which holds a 3% stake in U.S. rare earth company MP Materials. The U.S. Department of Defense is MP Materials' largest shareholder, having invested $400M last year. The potential deal could consolidate Chinese government control over the sector.

Gina Rinehart's Hancock Prospecting has invested in nine mining and metals companies in a year, diversifying from iron ore. Recent investments include A$8.77 million in White Cliff Minerals (ASX: WCN) for a 13.5% stake, and A$125 million in Arafura Rare Earths (ASX: ARU). Hancock also holds stakes in Rare Earths Americas (NYSE: REA), MP Materials (NYSE: MP), and Lynas Rare Earths (ASX: LYC). The company has also invested in defence contractors and SpaceX.

MP Materials (NYSE:MP) reported Q2 2026 results with a 41% YoY increase in NdPr production and revenue more than doubling. The company secured a long-term gadolinium oxide deal and expects Q4 2026 commercial magnet deliveries to GM and Apple. Adjusted EBITDA improved significantly, and the company is advancing strategic initiatives like TenX and Project Swarm.

MP Materials (NYSE:MP) expects to start delivering magnets to General Motors by year-end and produce dysprosium and terbium for internal use. The company has a long-term gadolinium contract and is building a magnet facility for the U.S. Department of Defense. Corbett highlighted supply risks due to China's export restrictions, driving customer interest in Western rare earth supply. MP Materials plans to support investments with its balance sheet and cash generation.