China moved recently to strengthen its status as a global supply-chain leader in rare-earths metals by approving the merger of three state-owned producers into one of the largest rare-earths companies in the world, the Wall Street Journal reports.
The pending merger of China Minmetals Corp.,a state-owned resource company; Aluminum Corp. of China Ltd., non-ferrous metals company; and Ganzhou Rare Earth Group Co. located in a region known for its rare-earths deposits, will create China Rare Earth Group. The new company is predicted to control almost 70% of China's domestic production of the rare-earths metals necessary for making high-tech products, the China Economic Review reports.
Merging the three state-owned producers into one mega company could give China control of 55% to 70% of the world's rare earths-metals mining and 85% to 90% of the refining process, the Wall Street Journal reports.
The consolidation of the companies comes when there are already concerns China might use its dominance in rare-earths metals to limit the global supply chain to the West. President Joe Biden has said that this is one of the main areas in which the country needs to reduce supply-chain risks. Rare-earths metals are used to manufacture such things as components in smartphone touch screens, electric cars, and missile-defense systems.
China state media has stated the country will not use its dominance in production of rare-earths metals to limit their availability to other countries, but then stated that option could open if and when “foreign companies hurt China’s interests.”