Chinese state-owned company considers acquisition of Shenghe Resources

China's state-owned China Rare Earth Group is considering the acquisition of rare earth metals producer Shenghe Resources. Negotiations have been underway since the beginning of this year. The deal is particularly notable because of Shenghe's foreign assets. The company holds a 3% stake in American MP Materials. MP Materials' largest shareholder is the US Department of Defense. The company also operates the Mountain Pass rare earth mine in California.

Shenghe stated on Sunday that reports circulating in the media about a possible deal are false. According to the company, there is no plan to transfer its controlling stake to another party.

If the deal goes through, the Chinese state's control over the country's rare earth sector will increase even further. These materials are needed for the electric vehicle, electronics, and defense industries.

Source: Investing.com