Trump Aides See China Cheating on Trade Deal but Shun Retaliation

Huaxi Nonferrous announced on September 18 that its indirect controlling shareholder Guangxi Key Metals Group, together with its shareholders Beibu Gulf Port Group and the Key Metals Equity Fund, signed a Cooperation Framework Agreement with China Minmetals Corporation. China Minmetals plans to increase capital in Guangxi Key Metals Group to acquire a 51% stake and consolidate Guangxi Key Metals Group into its financial statements. After the transaction is completed, Beibu Gulf Port Group will no longer indirectly control the company, and the actual controller of Huaxi Nonferrous will change from the State-owned Assets Supervision and Administration Commission of the People's Government of Guangxi Zhuang Autonomous Region to China Minmetals, which will indirectly hold 56.47% of Huaxi Nonferrous. Because China Minmetals' indirect holding in the company through Guangxi Key Metals Group will exceed 30% of the issued shares, a mandatory general offer obligation is triggered. China Minmetals plans to make a general offer at 47.40 yuan per share to all shareholders of Huaxi Nonferrous A-shares other than the controlling shareholder Huaxi Group, proposing to acquire 275 million unrestricted tradable shares, approximately 43.53% of the total share capital, all in cash, with a maximum total amount of approximately 13.051 billion yuan. Trading in the company's shares will resume on Monday, September 21, 2026. This capital increase transaction still needs to be reviewed by the shareholders' meeting of Guangxi Key Metals Group, pass the concentration of undertakings review by the State Administration for Market Regulation, and obtain approval from the competent state-owned assets supervision and administration authority. The tender offer can only be finally implemented after the completion of the delivery of the 51% stake acquired by China Minmetals through the capital increase.

China Rare Earth Group, a state-owned rare earth giant, is in talks to acquire Shenghe Resources, according to two people familiar with the matter. The talks began this year, and China Rare Earth Group wants to take a controlling stake, the sources said. If a deal is reached, Shenghe's holdings in overseas companies would be transferred, including a 3% stake in US rare earth company MP Materials, which would put China Rare Earth Group in the position of investing in MP, whose largest shareholder is the US Department of Defense. A successful acquisition would bring one of China's last major privately owned rare earth mining and refining companies under China Rare Earth Group, ending a decades-long effort to consolidate the sector under state control. Shenghe acquired Australia's Peak Rare Earths last year. According to one of the sources, a deal would make it easier for Shenghe to secure the quotas the Chinese government uses to manage supply. China Rare Earth Group, Shenghe Resources and China's Ministry of Commerce did not respond to requests for comment.