China has merged three of its rare earth entities into one giant company, further consolidating its position as the dominant force in a market seen as crucial for the new generation of electronic devices.
China Rare Earths will report directly to the Chinese government and comprise about 70% of the country’s rare earth production.
Daan de Jonge, a consultant at CRU Group, told the Telegraph: “This will mean that the pricing power of key rare earths, such as dysprosium and terbium, will be in the hands of one supergroup.”
Dysprosium and terbium are classified as heavy rare earths and used in defence, technology and electric vehicle applications, while lighter rare metals such as neodymium and praseodymium are critical for the magnets used in many electrical devices.
Around 90% of rare earth production already comes from China, with Western governments expressing fears this stranglehold over supplies might be ‘weaponised’ in future though the government in Beijing has denied any such plans.
Early-stage rare earth projects developer and AIM-listed Mkango Resources, which has projects in Africa, ticked up 2% to 29.5p on the news.