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Rare Earths, Strategic Minerals for the Global Industry, Can Be Used as a Diplomatic Trump by China to Control Market Deals.
Revolution in Mining: China Will Restructure Three Rare Earth Producers to Create a State-Owned Enterprise, Aiming to Extend the Control of Production Across the World’s Supply Chain, Including Exports. The new company will hold nearly 70% of the national production quota for essential metals used in high-tech product manufacturing.
The move aiming to accelerate the development of resources and processing technology also seeks to strengthen Beijing’s control over the mining sector in anticipation of prolonged trade tensions with Washington.
What Is China Hiding and How Can It Blackmail the World?
Beijing to Tighten Market Control with SOE Controlling 70% of National Production
By restructuring the country’s main rare earth companies, the government aims to expand production control across the entire supply chain, including exports. The move comes as the U.S. seeks to create an alternative rare earth supply chain by joining forces with Australia.
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China Minmetals Corporation (CMC), a major state-owned resources company, China Aluminum Corporation, a major state-owned metals company, and the government of Ganzhou city in Jiangxi province, known for its rare earth deposits, are “planning a strategic reorganization” of their respective rare earth subsidiaries, according to CMC’s listed subsidiary.
Peng Huagang, Secretary-General of the State-owned Assets Supervision and Administration Commission, which oversees state enterprises, said at a press conference this week that the government would “promote the restructuring of rare earths to create a world-class” mining
Although the definition of “restructuring” is unclear, if it is to be a complete merger, the new company’s share of the national quota for medium and heavy rare earths in China will be nearly 70%, and for rare earths overall, including light rare earths, it will be nearly 40%.
Medium and heavy rare earths, such as dysprosium and terbium, are considered essential for the production of high-performance magnets used in motors and other components of electric vehicles, and are also used in drones and U.S. military missiles.mining
Chinese President Sees Metals as a Vital Part of China’s Economy
Chinese President Xi Jinping has long viewed metals as a vital part of China’s economy, stating in 2019 that “rare earths are an important strategic resource.” A bill on rare earths was introduced in January and is currently being discussed in the National People’s Congress, China’s parliament.mining
China is responsible for 60% of the world’s rare earth production, according to the U.S. Geological Survey. The main export destinations are Japan (49% by value), followed by the U.S. (15%), according to Chinese media.mining
Rare Earths Can Also Be Used as a Diplomatic Trump for China mining
For Xi’s leadership, rare earths can also serve as a diplomatic trump. When China protested against Japan’s nationalization of the Senkaku Islands in 2010, Beijing halted rare earth exports as a means to pressure the Japanese side. The new move to restructure the rare earth industry may therefore affect the supply of rare earths to Japan and the U.S., analysts warn.mining
The demand for rare earths is expanding due to the global proliferation of EVs. Due to political instability in Myanmar, another major rare earth producer, the prices of dysprosium and terbium in China have increased by around 60% and 90%, respectively, from a year ago. At the end of September, the Chinese government expanded the rare earth production quota by 20% compared to the previous year.
I would love to know if you already knew how important these minerals are for the production industry worldwide. Let us know in the comments section. Don’t forget to leave 5 stars and activate CPG notifications to follow all the updates in the mining world. See you next time!
Estudiante del Postgrado en CERÁMICA y REFRACTARIOS Y TIERRAS RARAS. Me preocupa el EGOÍSMO Y ADMIRO MUCHO LAS ALIANZAS
Excelente estoy buscando una ALIANZA para realizar la Fase Final de la carrera de Ciencias de los Materiales Refractarios y Oxidos de Tierras raras. Estudios de Postgrado en Desarrollo profesional con la UNEG – UNEXPO
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