State gains more control over critical raw materials. Further mergers are possible.
The consolidation of China’s rare earth industry, announced in early December, got underway last Thursday. The merger of China Minmetals Rare Earth, Chinalco Rare Earth and Metals and Ganzhou Rare Earth Group will create the state-controlled China Rare Earth Group, based in Jiangxi province, the Financial Times (FT) reported.
The consolidation is expected to ease competitive pressures between the companies and increase the influence on commodity pricing. According to the South China Morning Post, the merger also includes two companies that develop technologies around strategic raw materials.
In the coming years, the newly created company may also acquire Xiamen Tungsten Co and Guangdong Rare Earth Group, the FT added. With China Rare Earth Group and China Northern Rare Earth Group, two players would then dominate the industry in China.