Dynamism builds business as minerals are crucial 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 metals industry and provide impetus to companies from smelting processing to technology research in the years to come, analysts said 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, changed its name to China Rare Earth Group Resources Technology Co Ltd. It aims to realize the high-quality development of the rare earth metals industry and strengthening its brand impact and market influence.
The move marks a new stage in the integration of China’s rare earth industry, said Weng Jieming, vice chairman of the State 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 centrally managed state-owned enterprise based in Ganzhou, Jiangxi Province, to further enhance the concentration of the country’s rare earth industry, consolidate the asset quality of listed companies and facilitate integration of industrial management and capital operations, 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 connect 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 economics from the China University of Mining and Technology in Beijing.
Established in December 2021 jointly by three companies – Aluminum Corp of China, China Minmetals Corp and Ganzhou Rare Earth Group Co Ltd – and two research companies, China Rare Earth Group Co Ltd’s business mainly includes exploration, exploration, smelting and Deep processing of rare earth metals.
Business lines 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 remarkable professional merits, 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 various technologies, from wind turbines to mobile phones to LED light bulbs and televisions.
China is the world’s largest exporter and reserve holder of rare earth metals. Its exports of rare earth minerals rose 5.7 percent year-on-year to 33,539 tons in the first eight months of this year, statistics from the General Administration of Customs showed.
As the government is determined to undertake deep integration of the same or homogeneous companies into its core SOEs, it has already accelerated the building of world-class groups with strong profitability and optimal resource allocation in key areas such as inspection and testing. Medical and healthcare, device manufacturing, artificial intelligence, new energy, cloud computing, steel, logistics and other strategic and emerging industries.
“As the scope for reducing the number of key SOEs through mergers and restructuring is limited, the government is more inclined to integrate its companies to better optimize resource allocation,” said Xu Baoli, a researcher at SASAC’s research center.
Thus, at the end of August, two subsidiaries engaged in testing and inspection business, previously owned by China General Technology (Group) Holding Co Ltd, were merged by China Certification and Inspection Group.
COFCO Group and China Grain Reserves Group Ltd also established a new company – China Enterprise United Grain Reserve Co Ltd – in mid-August to manage the country’s grain reserves through equity cooperation.
Li Kongyi, an analyst at Shanxi Securities, predicted that there will be more reorganization and integration moves at key SOEs in the coming years. Based on the needs of national opening-up policies and economic growth, the restructuring of core SOEs in industries such as energy, automobile, transportation and military will be accelerated.