China merges 3 rare earths miners to strengthen dominance of sector


China has approved the merger of three major rare earth companies, becoming the world’s largest producer of strategic resources and creating a state-owned powerhouse that strengthens government control over the industry.

In the statement, China Minmetals Rare Earth Co is a group under the direct control of the new central government, merging with two other state-owned giants, Chinalco Rare Earth and Metals Co and Gangzhou Rare Earth Group.

State media have pointed out that it controls 70% of China’s rare earth production, calling the new organization China Rare Earth Group an “aircraft carrier” in terms of its size and industrial strength. Rare earth elements are a group of 17 minerals used in the production of everything from electronic products to electric vehicles and wind turbines.

This move is the latest step by Beijing. Integrate industry Often, end users suffer from severe price fluctuations that can cause headaches. The merger will reduce the competitive pressure on the industry by reducing the number of rare earth producers in China from six to four.

The Chinese government is using the same strategy in other industries, including rail and shipping companies, to prevent rival groups from slashing each other when bidding on favorable international contracts.

“Given its strategic importance, the power of the market cannot force the cost of rare earths to be determined,” said one close to Ganzhou rare earths who asked not to be identified. “We need to stabilize prices so that end users can control costs and move up the value chain.”

The Chinese government also wants to strengthen the industry as other large importers of rare earths mined or refined in the United States and China are aiming for development. Alternative source, Large mines in California and Australia, etc.

President Xi Jinping visited Jiangxi Province during the height of the US-China trade war in May 2019. Jiangxi Province is home to many rare earth miners, including Ganzhou rare earths, emphasizing the government’s grip on the industry.

According to the government’s policy adviser, China Rare Earth is based in Jiangxi Province and is ready to acquire Xiamen Tackle Co., Ltd. and Guangdong Rare Earth Group Industrial Group in the next few years.

The price index calculated by Inner Mongolia’s Baotou Rare Earth Products Exchange has risen by more than 40% over the past two years, thanks to strong demand from new energy vehicle manufacturers. The political turmoil in Myanmar, one of the largest exporters of rare earths to Chinese refiners, has also contributed to the supply shortage.

“We couldn’t invest in R & D because of cost estimates,” said an executive at Wonder Electric, a company that uses rare earths in Fujian.

However, it is not clear how quickly the new group can increase capacity and volume. Ganzhou rare earths have been out of production for more than 6 years to meet environmental requirements.

China merges 3 rare earths miners to strengthen dominance of sector Source link China merges 3 rare earths miners to strengthen dominance of sector

The post China merges 3 rare earths miners to strengthen dominance of sector appeared first on California News Times.

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