China’s Shenghe Resources announced on Sunday that the halt in shipments of rare earth raw concentrate from its American partner is not expected to significantly disrupt production, thanks to the company’s varied supply chain.
MP Materials, the operator of the sole rare earths mine in the United States, revealed on Thursday that it has ceased exporting these essential minerals to China due to the hefty 125% tariffs imposed by Beijing as a counteraction to U.S. tariffs on Chinese imports established during Donald Trump’s presidency.
Rare earth elements consist of a set of 17 metals that are crucial for manufacturing magnets, which convert electrical energy into motion for electric vehicles, mobile phones, and various electronic devices. As the largest producer globally, China this month restricted exports of seven additional rare earths as part of its retaliatory export control measures.
Despite China’s leading position in rare earth refining, the country still imports a significant volume of concentrate from other sources to support its processing facilities, including considerable amounts from MP Materials.
Shenghe emphasized in a statement, “We have established a diverse supply chain for raw rare earth materials, including imports from Sichuan and other nations, as well as alternatives such as monazite. Our supply agreement with MP remains in effect.” Further specifics from Shenghe were not disclosed.
In January 2024, the two companies renewed their offtake agreement through Shenghe’s Singapore subsidiary, which will be active for two years and can be extended for an additional year afterward.
Data from customs indicates that U.S. imports of rare earth raw materials by China have been declining over the past two years, exhibiting a drop of 13.7% in 2023 and 16.9% in the previous year.