The company cites lack of commercial viability; Chinese offtaker sees little impact.
MP Materials, operator of the only rare earth mine in the United States, has suspended exports of rare earth raw materials to China due to sharply increased tariffs. “Selling our valuable critical materials under 125% tariffs is neither commercially rational nor aligned with America’s national interest,” the company said in a statement late last week. As a response to trade tariffs imposed by U.S. President Donald Trump, under which China faces the highest rate currently, the People’s Republic retaliated with tariffs of its own. U.S. companies now face a 125% levy to export goods to China.
A substantial share of MP’s historical revenue came from selling rare earth concentrate to its fourth-largest shareholder, China’s Shenghe Resources, which further processes the material. Despite the halt, Shenghe Resources issued a press release on Sunday (PDF) affirming that its contract with MP remains valid. The company also emphasized that it has built a diversified supply chain—including domestic sources and international imports—to minimize any disruption resulting from MP’s decision. Shenghe added that it closely monitors the situation and will continue to meet operational demands.
MP Materials, meanwhile, highlighted that its California refinery now processes nearly half of its production, with refined products primarily sold in markets outside China. The company stated it will maintain operations at its Mountain Pass mine, stockpiling concentrate while accelerating the development of its midstream and downstream processing capabilities. It also highlighted efforts to future heavy rare earth processing as well as magnet manufacturing in its Texas facility. Currently, China has a near-monopoly on both heavy rare earth production and magnet making, accounting for over 90% and 95% of the global capacity, respectively.
Photo: Aleksander Tumko