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A joint venture between two of China’s mining heavyweights has pulled the plug on its rare earth project in Laos, effective August 8, 2026. The Mengkang project, controlled by Chifeng Jilong Gold Mining and Xiamen Tungsten, was suspended following board approval on August 7, with the companies citing the need to comply with evolving regulatory policies and ensure corporate social responsibility.
What happened at Mengkang
The Mengkang project sits in Xiangkhouang Province, Laos, and represents the only rare earth asset held by the Chifeng-Xiamen joint venture. Chifeng Gold holds 51% of the operation, with Xiamen Tungsten controlling the remaining 49%. The pair acquired a 90% stake in the project for roughly $19 million back in March 2024.
The project was still in its trial-mining stage when the suspension came down. In 2025, Mengkang produced 998.56 metric tons of rare earth products. That output generated a net loss of approximately 54 million yuan for Chifeng Gold, representing about 1.75% of Chifeng Gold’s consolidated net profit.
First-quarter 2026 output plummeted to just 63.6 metric tons, a fraction of what the project had managed in the prior year.
The Laos policy puzzle
Laos had quietly begun promoting rare earth investment in 2024, hoping to attract foreign capital and bolster its foreign exchange reserves. This marked a reversal of previous restrictions that had limited mining activity, partly due to environmental concerns around rare earth extraction.
The Mengkang suspension specifically references the need to navigate these evolving policies. Mining rights and permits are currently in the renewal process, and both Chifeng and Xiamen Tungsten have indicated they’ll be watching Laotian policy developments closely before making any moves to restart operations.
China’s rare earth dependency problem
China dominates global rare earth processing and has long been the world’s largest producer. Chinese companies have increasingly looked to neighboring countries with significant deposits, with Laos and Myanmar emerging as key import sources. The suspension of Mengkang highlights the operational and regulatory risks associated with Chinese-backed mining projects in the region.
What to watch from here
The immediate financial impact on Chifeng Gold is manageable, with the loss representing less than 2% of consolidated net profit. For investors tracking the rare earth space, the Mengkang suspension illustrates the risks that accompany resource extraction in developing economies. The $19 million acquisition price was modest by mining standards, but the project’s inability to reach profitability during its trial phase, combined with regulatory friction, reflects the broader challenges facing such ventures.
Stakeholders should be tracking how Laotian policy on resource extraction evolves over the coming months, especially regarding environmental management requirements and permit renewal processes, and whether the Mengkang suspension is an isolated event or the beginning of a broader reassessment of Chinese-backed mining projects in the region.
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