China has endorsed the merger of the three rare earth companies, creating a strong government structure that will become the world’s largest technology development company and strengthen government control over those companies.
In a statement, China Minmetals Rare Earth Co said it had been approved by the State Council, the country’s prime minister, to join two other state giants, Chinalco Rare Earth and Metals Co and Ganzhou Rare Earth Group, to form a new group. organization under the direct control of the state.
State media has called the new organization, China Rare Earth Group, a “aircraft carrier” based on its size and industrial capacity, claiming that it controls 70 percent of China’s supplies. Global demand is a group of 17 minerals that are used to make everything from electric to electric cars and wind turbines.
The move is a recent step by Beijing to combine companies they are often affected by price fluctuations that cause headaches for users. The merger will reduce the company’s competitiveness by reducing China’s global production rate from six to four.
The Chinese government has used the same approach in other industries, including railways and waterways, in order to prevent rival groups from having to contend for lucrative foreign contractors.
“We will not allow the market to show the amount of land it needs to be vacant based on its value,” said a person close to Ganzhou Rare Earth who asked not to be identified. “We need to keep prices stable so that consumers can control costs and raise value.”
The Chinese government also wants to strengthen these companies because the US and some of the world’s poorest miners are being mined or refined in China. other means of acquisition, such as large mines in California and Australia.
At the start of the China-US trade war in May 2019, President Xi Jinping visited Jiangxi province, where a number of miners including Ganzhou Rare Earth were set up, to monitor his government’s performance in the industry.
China Rare Earth will be based in Jiangxi and is close to acquiring Xiamen Tungsten Co and Guangdong Rare Earth Group Industry Group in the coming years, according to government policy advisers, after which there will be only two players in the group.
Prices calculated by the Baotou Rare Earth Product Exchange in Inner Mongolia have risen by 40 per cent over the past two years, due to the strong growth of new car manufacturers. Political unrest in Myanmar, one of China’s leading suppliers of land mines, has also contributed to the decline.
“We are struggling to make cost estimates and this has hindered us from doing research and development,” said the CEO of Wonder Electric Co, a Fujian region that uses scarce land.
It is unknown at this time what he will do after leaving the post. Ganzhou Rare Earth has suspended production for more than six years to meet environmental requirements.
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