On December 23, the new central enterprise China Rare Earth Group Co., Ltd. was formally established.

China Rare Earth Group

China Rare Earth Group is composed of China Aluminum Group Co., Ltd., China Minmetals Group Co., Ltd., and Ganzhou Rare Earth Group Co., Ltd. in order to realize the complementary advantages of rare earth resources and the development of rare earth industry. The company and two other rare earth technology research and development enterprises are large rare earth enterprise groups established in accordance with the principles of marketization and rule of law.

According to reports, the formed China Rare Earth Group is a central enterprise with diversified shareholding directly supervised by the State-owned Assets Supervision and Administration Commission of the State Council. The shareholding structure is as follows:

The State-owned Assets Supervision and Administration Commission of the State Council holds 31.21%, China Aluminum Group Co., Ltd., China Minmetals Co., Ltd. and Ganzhou Rare Earth Group Co., Ltd. hold 20.33% respectively, and China Iron and Steel Research Technology Group Co., Ltd. and Youyan Technology Group Co., Ltd. hold 20.33% respectively.

The establishment of China Rare Earth Group is a beneficial exploration and attempt made by Chinalco, China Minmetals and Ganzhou Rare Earth Group based on their own development needs and adapting to the laws of industry development.

China Rare Earth Group will focus on rare earth technology research and development, exploration and development, separation and smelting, deep processing, downstream applications, complete sets of equipment, industrial incubation, technical consulting services, import and export and trade business, and strive to build a world-class rare earth enterprise group with global competitiveness .

Take back the right to speak in the market

Deng Xiaoping once said: "The Middle East has oil, and China has rare earths."

Rare earths, minerals containing 17 kinds of rare metals, are called industrial gold because they are non-renewable, expensive to mine, and widely used. Among them, the United States is highly dependent on China for rare earths used in the military.

Rare earth is a national strategic resource, but it has been sold as cheap soil for a long time. Rare earth has long been regarded as a common resource for export. The main reason is the uncontrolled domestic mining and export, and even in order to compete for export share, private enterprises have started a price war.

In March 2020, the Ministry of Industry and Information Technology stated that "China's rare earths did not sell at a rare price, but sold the price of 'earth'." In December, the three major rare earth groups finally restructured their assets, and the concentration of the domestic rare earth industry reached a new level.

According to research, in the next three years, it will be difficult for overseas rare earths to have new supply. The rare earth mine in Myanmar, which accounts for 12.5% of the global output, is due to expansion plans; the mine capacity in the United States has climbed to the stage of full production, and the current strategic focus is on the construction of its own separation plant (planned to be completed in 2023). That is to say, the increase of rare earth in the world depends on China.

In addition to the advantages of rare earth production, China has the world's leading rare earth refining technology. Academician Xu Guangxian of China has not only achieved the reflux cascade extraction of rare earths, but the purity of praseodymium and neodymium after separation can reach a world record of 99.99%. The U.S. Government Accountability Office has estimated that it may take 15 years for the United States to build a domestic rare earth supply chain.

The establishment of the new state-owned enterprise signifies that China is taking back the pricing power of rare earths. The era of rare earth cabbage prices in China is gone forever.