China Creates Rare Earth Superpower with Three Company Merger
- December 27, 2021
- Posted by: Quatro Strategies
- Category: Mining
China Minmetals Rare Earth Co said it will merge with two other Chinese rare earth producers under the state assets regulator, creating a “super company” in the strategic industry. China is already dominant in global rare earth production, and efforts to consolidate the nation’s rare earth companies have been considered as a way to increase influence over pricing.
China’s 85-90% control over the sector means a problematic reliance for the West on Chinese supply, especially at a time when relations are tense.
Minmetals Rare Earth has signaled such a restructuring in September. The company said the merger was approved by the State-owned Assets Supervision and Administration Commission.
The merger will see Minmetals Rare Earth, Chinalco Rare Earth & Metals Co and China Southern Rare Earth Group Co transfer into a new company, which was not named.
The new company will be second only to China Northern Rare Earth Group in terms of output. It will account for around 70% of China’s heavy rare earths production. This will mean that pricing of some key rare earths, such as dysprosium and terbium, will be in the hands of one company.
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