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Group sets eyes on nation's rare earth industry

By ZHONG NAN | China Daily | Updated: 2022-09-23 07:48

Rare earth oxides. (Clockwise from top center) praseodymium, cerium, lanthanum, neodymium, samarium, gadolinium. [Photo provided to China Daily]

Momentum builds for business as minerals critical elements for high-tech development

The unveiling of China Rare Earth Group Resources Technology Co Ltd will effectively bolster the growth of China's rare earth metal industry, generating momentum for businesses from smelt processing to technology research in the years ahead, said analysts on Thursday.

The comment came after China Minmetals Rare Earth Co Ltd, a subsidiary of China Rare Earth Group Co Ltd and a Shenzhen Stock Exchange-listed company, was renamed China Rare Earth Group Resources Technology Co Ltd. It is aimed at realizing the high-quality development of the rare earth metals industry and enhancing its brand effect and market influence.

This move marks a new stage in the integration of the rare earth industry in China, said Weng Jieming, vice-chairman of the State-owned Assets Supervision and Administration Commission of the State Council, the country's top State asset regulator.

This will help China Rare Earth Group Co Ltd, a Ganzhou, Jiangxi province-based centrally administered State-owned enterprise, further improve the concentration of the rare earth industry in the country, consolidate the asset quality of listed companies, and facilitate the integration of industrial management and capital operation, Weng said at the inauguration ceremony for the new company on Wednesday.

In addition to the name change and equity integration, China Rare Earth Group Co Ltd will better link the upstream and downstream sectors of the rare earth industry chain, and help promote the upgrading of traditional industries and the development of strategic emerging sectors, said Ding Rijia, a professor specializing in mining economies at the China University of Mining and Technology in Beijing.

Jointly incorporated by three companies — Aluminum Corp of China, China Minmetals Corp and Ganzhou Rare Earth Group Co Ltd — and two research firms in December 2021, China Rare Earth Group Co Ltd's business mainly involves research, exploration, smelting and deep processing of rare earth metals.

Its businesses will also include downstream applications, equipment manufacturing, industrial incubation, technical consulting services and foreign trade.

Ao Hong, chairman of China Rare Earth Group Co, said the group will strive to build the newly listed company into a leading listed company in the industry with notable professional advantages, great market influence and strong core competitiveness.

Rare earth metals are important strategic resources and key elements in the development of high-end technologies and green applications. These are highly valued by several technologies ranging from wind turbines to mobile phones, LED light bulbs and televisions.

China is the world's largest exporter and reserve owner of rare earth metals. Its exports of rare earth minerals grew 5.7 percent year-on-year to 33,539 metric tons in the first eight months of this year, statistics from the General Administration of Customs showed.

As the government is determined to conduct in-depth integration of the same or homogeneous businesses among its central SOEs, it has already quickened the cultivation of world-class groups with strong earning strength and optimal resource allocation in key areas such as inspection and testing, medical and healthcare, equipment manufacturing, artificial intelligence, new energy, cloud computing, steel, logistics and other strategic as well as emerging industries.

"Since the space for cutting the number of central SOEs through mergers and reorganization has been limited, the government is more inclined to integrate their businesses to better optimize resource allocation," said Xu Baoli, a researcher at SASAC's research center.

For instance, two subsidiaries involved in the testing and inspection business, previously owned by China General Technology (Group) Holding Co Ltd, were merged by the China Certification and Inspection Group in late August.

COFCO Group and China Grain Reserves Group Ltd also set up a new company — China Enterprise United Grain Reserve Co Ltd — to manage the country's grain reserves through equity cooperation in mid-August.

Li Kongyi, an analyst at Shanxi Securities, predicted that there will be more reorganization and integration moves among central SOEs in the coming years. Based on the needs of the nation's opening-up policies and economic growth, the reorganization of central SOEs in industries such as energy, automobile, transportation and military industries will be accelerated.

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