China Merges Mining Assets to Create Rare Earth Mining Giant

Recently, China merged its mining assets to create a rare earth mining giant. Earlier this year, foreign media reported that the Chinese government would issue a ban on rare earth exports. At this stage, the country appears to be tightening state controls on rare earth production.

Previously, rare earth metals were mined by six major companies, but the assets of these companies are being combined to create the China Rare Earth Group. The new mining giant will be based in the resource-rich province of Jiangxi. Rare earths are critical to the production of chips and other components used in high-tech products ranging from computers to weapons systems. The move is expected to give the government greater control over the supply and price of these commodities.

China reportedly controls up to 90% of the global supply of rare earth metals. Outside of our country, only a few rare earth mining companies exist. Washington has long been concerned that Beijing may use its control of rare earth supplies for "strategic purposes”.

The United States has taken steps to encourage the production of more rare earths in Australia, a staunch ally. Back in February, the U.S. Department of Defense signed a technology investment agreement with Australia's Lynas Rare Earths, which the Pentagon calls "the largest mining and processing company for rare earth elements outside of China.

Under the terms of the deal, Lynas will build a light rare earths processing plant in Texas. President Biden has also issued an executive order listing rare earth minerals as one of four key areas where stronger policy options are needed to reduce supply chain risk.

A visit by President Xi to a rare earth refinery in 2019 was seen by many as a sign that the rare earth industry had finally 'arrived'. Beijing has been tight-lipped about its plans. China has no intention of using rare earths as a countermeasure against any country, the Global Times wrote earlier this year, adding, however, that it remains an option when "foreign companies harm Chinese interests.

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