China making one company to rule all rare earths
Business & Technology
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China plans to restructure three rare earths producers to create a “world-class company” with a nearly 70% share of the materials’ domestic production quota:
- A key ingredient in electric vehicles and smartphones, rare earths are one of many resource battlegrounds several countries are trying to dominate.
- Subsidiaries of three major rare earth producers are “reorganizing”: China Minmetal Corp. (CMC), the Ganzhou City government, and China Aluminum Corp.
The context: China accounts for 60% of the world’s production of rare earths, according to the U.S. Geological Survey. Export destinations include Japan (49% by value) followed by the U.S. (15%).
- Due to political turmoil in Myanmar, the source of about half of China’s rare earths concentrates, prices of dysprosium and terbium have increased 60% and 90%, respectively, from a year ago.
- Meanwhile, Beijing’s efforts are being met by plans in the E.U., U.S., Australia, and Japan to strengthen their hands in the industry.
Why it matters: As global demand for EVs rise, rare earths have come to symbolize the geopolitical confrontation in sedimentary form. But China’s preparations for heavier competition doesn’t mean the metals are a zero-sum game, as some experts claim.
