The new company, China Rare Earth Group Co, will operate under the state asset regulator

China’s State-owned Assets Supervision and Administration Commission (Sasac) has announced the establishment of China Rare Earth Group Co, a new national rare earths company, after a merger.

Planned to be operated under the state asset regulator, the new company will be formed through the consolidation of three rare earth producing entities – Minmetals Rare Earth, Chinalco Rare Earth & Metals Co and China Southern Rare Earth Group Co.

According to state media CCTV, the new conglomerate aims to become top rare earths exploration and trading firm. Rare earths are used in consumer electronics and military equipment.

SASAC will own a stake of 31.2% in the new entity while China Minmetals Rare Earth, Chinalco and Ganzhou Rare Earth will have 20.3% interest each, reported CCTV.

Furthermore, Jiangxi Ganzhou Rare Metal Exchange and Ganzhou Zhonglan Rare Earth New Material Technology are planned to be merged into the new entity, according to Reuters.

CRU Group consultant Daan de Jonge was cited by the news agency as saying that the new entity would account for around 70% of heavy rare earths production in the country, based on quotas for the first half of 2021.

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

China is said to be the world’s leading rare earths producer, controlling up to 90% of the rare earths processing sector.