China To Control World’s Rare Earths


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By Stefan J. Bos, Chief International Correspondent Worthy News

BEIJING (Worthy News) – In a Christmas setback for the United States, China moved to cement its position as the world’s dominant supplier of “rare earth,” 17 minerals for consumer electronics and military equipment.

China Minmetals Rare Earth Co announced it would merge with two of China’s other top rare earth producers into a new company under the state assets regulator.

That would establish a global force in the strategic industry of the Communist-run nation, authorities said.

Moves to consolidate China’s “Big Six” state-run rare earth companies were seen as a way by Beijing to boost influence over pricing and expand China’s global footprint.

Minmetals Rare Earth, which confirmed in September that restructuring talks were underway, said its parent had been notified by the State-owned Assets Supervision and Administration Commission (Sasac) that the merger had been approved.

Under the deal, the equity of Minmetals Rare Earth, Chinalco Rare Earth & Metals Co, and China Southern Rare Earth Group Co will transfer into a new firm that was not named. Jiangxi Ganzhou Rare Metal Exchange Co, a fledgling bourse for spot transactions, and Ganzhou Zhonglan Rare Earth New Material Technology Co will also join the new entity.

Ganzhou, a city in southern China’s Jiangxi province, is home to Minmetals Rare Earth and China Southern Rare Earth Group. It is a hub for heavy rare earth smelting and separation – or processing into a form that manufacturers can use.

HEAVY PRODUCTION

Expert Daan de Jonge said the combined entity would be second only to China Northern Rare Earth Group and account for around 70 percent of China’s heavy rare earths production.

“This will mean that the pricing power of key rare earths, such as dysprosium and terbium, will be in the hands of one ‘super group’,” he warned.

Prices for rare earth magnet inputs terbium and dysprosium have already risen sharply this year. Dysprosium and terbium are critical inputs for rare earth magnets used in electric vehicles to wind turbines.

Prices for both are up around 50 percent in 2021, striking multi-year highs as demand recovers from a pandemic-driven dip, experts said.

Outside China, most investments in the sector are the United States, Australia, and Britain, but the majority is focused on light rare earths, De Jonge said.

That means heavy rare earths would still need to be separated in China. Power curbs on Chinese industry and disruption to ore supply from Myanmar have constrained production, meaning further headaches for Washington.

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