According to people familiar with the matter, China has approved the establishment of a new state-owned rare earth company with the aim at maintaining its leading position in the global rare earth supply chain as tensions deepen with the US.
According to informed sources quoted by the Wall Street Journal, China has approved the establishment of one of the world’s largest rare earth companies in resource rich Jiangxi Province as soon as this month, and the new company will be called China Rare Earth Group.
China rare earth group will be established by merging the rare earth assets of several state-owned enterprises, including China Minmetals Corporation, Aluminum Corporation of China and Ganzhou Rare Earth Group Co.
People familiar with the matter added that the merged China Rare Earth Group aims to further strengthen the Chinese government’s pricing power on rare earths, avoid infighting among Chinese companies, and use this influence to weaken the efforts of the west to dominate key technologies.
China accounts for more than 70% of the global rare earth mining, and the output of rare earth magnets accounts for 90% of the world.
At present, western enterprises and governments are actively preparing to compete with China’s dominant position in rare earth magnets. In February, US President Biden signed an executive order instructing to evaluate the supply chain of rare earth and other key materials. The executive order will not solve the recent chip shortage, but hopes to formulate a longer-term plan to help the United States prevent future supply chain problems.
Biden’s infrastructure plan also promised to invest in rare earth separation projects. Governments in Europe, Canada, Japan and Australia have also invested in this field.
China has decades of leading advantages in rare earth magnet industry. However, analysts and industry executives believe that China’s rare earth magnet industry is firmly supported by the government and has a leading edge for decades, so it will be difficult for the west to establish a competing supply chain.
Constantine Karayannopoulos, CEO of Neo Performance Materials, a rare earth processing and magnet manufacturing company, said: “To extract these minerals from the ground and turn them into electric motors, you need a lot of skills and expertise. Except China, there is basically no such capacity in other parts of the world. Without some degree of continuous government assistance, it will be difficult for many manufacturers to compete positively with China in terms of price.”
Post time: Dec-07-2021