China Minmetals Rare Earth said on Wednesday that it would merge two of China's biggest rare earth producers into a new company under the state assets regulator. That was the end of a global partnership.
China is the world's largest producer of rare earths, a group of 17 minerals used for military equipment, and electronics. An acquisition of "Big Six," which led to a surge in influence in pricing, has been seen as a way to enhance the popularity of the company's value.
China's 85-90 % control of rare earths processing means that China's supply for the United States is uneasy, especially when times are really high.
Minmetals rare Earth, which flagged in September talks about a so-called restructuring were underway, said in a filing that its parent had been notified that the State-owned Assets Supervision and Administration Commission (Sasac) had approved the merger.
Under the merger, the equity of Minmetals Rare Earth, Chinalco Rare Earth & Metals Co and China Southern Rare Earth Group Co will transfer into a new company, which was not named.
Daan de Jonge said the combined entity would be only second only to China Northern Rare Earth Group in terms of global rare Earths output and account for around 70% of China's heavy rare Earths production, based on quotas for the first half of 2021.
"This will mean that the pricing power of rare earths such as dysprosium and terbium will be in the hands of one'supergroup'," he said.
Mysprosium and myterbium are key generators for rare earth magnetics, used all over the world from electric vehicles to wind turbines.
Prices for the two of them are up around half in 2021, with rises of more than two years as demand recovers from a pandemic, while prices are engulfing China's production and shortages of ore from Myanmar.
Jiangxi Ganzhou Special Metal Exchange,, and Ganzhou Zhonglan Rare Earth Special Machinery Technology will be folded into a new entity, too.
The city of Ganzhou, located in southern China's Jiangxi province, is home to rare Earths and Southern Rare Earth Group. This is a hub for smelting heavy rare earth - or processing to a form that can be used by manufacturers.
I have a lot of investment in separation in the United States, Australia and the UK, but the majority is concentrated on light rare earths, he said. That means that heavy rare earths would still need to be separated in China, he noted.