China Rare Earth Group, when established, will become the world’s leading rare earths company, helping the country tighten its control over the internationally strategically important mineral.
Beijing has set up a rare earth giant in an effort to cement China’s dominant position in global manufacturing as other countries compete for output.
The move will enhance the industry’s long-term sustainability and competitiveness, analysts say, and tighten China’s control over pricing and production of valuable minerals. international strategy.
The newly formed China Rare Earth Corporation will control more than a third of mainland China’s rare earth mining industry.
The State Council on Assets Supervision and Administration of China (SASAC) announced on December 23 that the State Council has approved the consolidation of units of the State Aluminum Corporation of China (Chinalco), the Corporation China Minmetals and Ganzhou Rare Earths Group to form a new group.
China Central Television reported that the establishment of China Rare Earths Corporation will help accelerate the sustainable development of ion-absorbing rare-earth ore found in southern China and support investment in China. new technology to separate and process into higher value products.
After the merger, China Rare Earths Group will own resources in Jiangxi, Shandong, Sichuan and Hunan provinces, as well as the Guangxi Zhuang Autonomous Region, as reported by China Galaxy Securities in end of September.
The group will control 37.6% of China’s rare earth mining operations, including nearly 70% of heavy rare earth production and nearly 42% of the nation’s ore processing and separation production.
China Galaxy analyst Hua Li said: “Against the backdrop of rising rare earth prices and the tightening of resource controls by various countries, rare earths could become a strategic tool for China to grasp. international status”.
Heavy rare earths, such as dysprosium used in nuclear reactors, are commonly found in southern China. This rare earth has a more limited supply and is more valuable than the light rare earth in Northern China. Light rare earths such as praseodymium and neodymium are used in electric cars and wind turbine magnets.
Rare earth prices have increased by 88% in the past year. Prices are tracked through a composite index compiled by the China Rare Earth Industry Association.
Over the past three decades, China has invested heavily in facilities that perform rare earth ore mining and processing work globally. The ore mining process is often harmful to the environment.
The United States was the world’s largest producer of rare earths in the 1980s. The country increased its production by 36% or 38,000 tons in 2020, as the strategic value of the metal increased. Rare earth minerals are important ingredients in the production of smart electronics, wind turbines, electric cars and military equipment.
Myanmar has increased production by 20% to 30,000 tons in 2020, while Madagascar has doubled production to 8,000 tons. China’s output increased 6% to 140,000 tons.
According to the US Geological Survey, China’s share of global production has fallen from 86% in 2014 to 58.3% in 2020. China’s rare earth reserves account for 36.7% of global reserves. last year, 18% higher than Vietnam and Brazil.
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