Chinese Rare Earth Processor Shenghe Sees Little Impact From Halt To US Feedstock Imports

China's Shenghe Resources said on Sunday the suspension of shipments of rare earth raw concentrate from its US partner will not significantly impact production due to the company's diversified supply chain.

MP Materials, which owns the only US rare earths mine, said on Thursday it had stopped shipping the critical minerals to China because of the 125% tariffs Beijing has slapped on US imports in retaliation for US tariffs on Chinese goods imposed by President Donald Trump.

Rare earths are a group of 17 metals used to make magnets that turn power into motion for electric vehicles, cell phones and other electronics. China, the world's dominant producer, this month halted exports of seven rare earths added to a retaliatory export control list.

While China dominates the refining of rare earths it imports some concentrate mined elsewhere to feed its processors, including large amounts by MP Materials.

"We have built a diversified supply channel of rare earth raw materials, with supply from Sichuan and other countries as well as monazite used as alternatives," Shenghe said in a statement. "The supply contract with MP is still valid."

Shenghe did not provide details.

The company and MP Materials renewed an offtake agreement in January 2024 through Shenghe's subsidiary in Singapore, which will be in effect for in two years and can be extended for another year after expiration.

China's imports of rare earth raw materials from the U.S. have been on the decline for two years, by 13.7% in 2023 and 16.9% last year, customs data shows.

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