China's Rare Earth Weaponization Becomes Reality... Approval of Merger of Three Companies

Emergence of Giant Company with 70% Market Share in Heavy Rare Earths
Rare Earths Serve as a Stern Warning Against Western Bloc's Attempts, Including the US, to Contain China

[Asia Economy Beijing=Special Correspondent Jo Young-shin] The Chinese government has given final approval for the merger of three companies related to rare earth mines and minerals. China is expected to further strengthen its market dominance through a giant rare earth single company that holds a 70% share of the global market. This merger approval is seen as a card to counter the United States' efforts to build a global semiconductor supply chain, making the weaponization of rare earths a reality.

rare earth elements

According to Chinese media such as Sina on the 23rd, the State Council of China approved the asset merger of China Minmetals Corporation, Aluminum Corporation of China Limited, and Ganzhou Rare Earth Group the day before. The name of the newly established corporation was decided as China Rare Earth Group, which will be directly managed by the State-owned Assets Supervision and Administration Commission (SASAC) under the State Council of China.

Chinese media forecast that the merged company, China Rare Earth Group, will be responsible for 70% of the production and refining of heavy rare earths. Rare earths are divided into heavy rare earths and light rare earths. Heavy rare earths are known to be used in cutting-edge technologies such as electric vehicle motors (permanent magnets).

Tian Zanheng, Deputy Director of the China Rare Earth Association, said, "Although rare earths are core materials used in advanced industries, they have not been properly managed so far," adding, "With this merger, China's scattered rare earth industry will be systematically managed."

Chinese media reported that the merged company will not only optimize rare earth resources but also strictly manage mining, refining, and export volumes. This implies that China could weaponize these resources at any time by leveraging its increased market dominance.

Earlier, the National People's Congress (NPC) of China passed an export control law in October last year that allows restrictions or bans on the export of military and other goods to protect China's national interests and security. Rare earths are included in this export control law.

The state-run Global Times cited a report from the U.S. think tank Center for Strategic and International Studies (CSIS), confirming once again that China supplies 85% of the world's rare earths and holds market decision-making power. It pointed out that rare earths will serve as a stern warning against attempts by the U.S. and other Western countries to contain China.

Chinese media evaluated that there had been many criticisms that China's valuable resources were inefficiently managed, but with this merger, excessive competition among Chinese companies will disappear and environmental issues will be resolved.

Chang Guowu, Deputy Director of the Ministry of Industry and Information Technology of China, stated at a rare earth industry forum held in Shanghai on the 20th, "We will support Chinese companies in taking the lead to form innovation alliances," and added, "We must unite our efforts through technological innovation to become a strong rare earth power."

As Chinese authorities announced their intention to manage rare earths, rare earth prices have been on the rise. Sina reported that prices of some rare earths such as praseodymium and neodymium increased by more than 40% compared to October (as of the 20th).

This content was produced with the assistance of AI translation services.