Rare Earths: Chinese State Gains More Control

China further consolidated its rare earth industry in late December 2021 through the merger of China Minmetals Rare Earth, Chinalco Rare Earth and Metals and Ganzhou Rare Earth Group, Reuters reports. The newly formed and state-controlled China Rare Earth Group is based in Jiangxi Province and, together with the China Northern Rare Earth Group , will dominate the industry in the People’s Republic in the future.

As early as September of last year, there were initial rumors of a planned merger between several market participants. Then, at the beginning of December, the indications of the project became more solid. It is intended to contribute to the further development of the sector, as China no longer just wants to extract and process strategic raw materials, but also earn money from the downstream stages of the value chain. This includes electro mobility, which is also driving demand for permanent magnets made of neodymium and praseodymium in China.

The country also has ambitious plans for the expansion of wind energy, for which rare earths are also needed. Finally, the merger will give China greater control over pricing.