Foreign media: China's rare earth industry will usher in more integration

supchina. Com commented on June 6: with its growing influence in the world, China's rare earth industry will usher in more integration.

Earlier, on the evening of June 5, China north rare earth (Group) High Tech Co., Ltd. (North rare earth), the world's largest rare earth producer, announced that the holding subsidiary Baotou Huaxing Rare Earth Technology Co., Ltd. (Huaxing rare earth) planned to absorb Baotou Keri rare earth materials Co., Ltd. (Keri rare earth), the holding subsidiary of the merger company.

The following is the main content of supchina's review article.

Rare earth elements are composed of 17 elements and are used in electrical and electronic components, as well as various industrial processes, including glass, ceramics and metallurgy. Most importantly, they are critical to the production of magnets for electric vehicles and many renewable energy technologies.

For decades, China has dominated global rare earth production as the United States and other countries outsourced heavily polluting mining and refining processes. However, this situation began to change in 2010. In 2014, China's share of global production fell from 86% to 58.3% in 2020, accounting for 37% of global rare earth reserves.

For a long time, China has always attached importance to the rare earth industry, and has taken key actions to integrate domestic rare earth mining companies, and made large-scale overseas acquisitions.

On June 5, China north rare earth (Group) Hi Tech Co., Ltd. (North rare earth), one of China's largest rare earth producers and the world's largest rare earth producer, announced that it would merge two holding companies:

The holding subsidiary Baotou Huaxing Rare Earth Technology Co., Ltd. (hereinafter referred to as Huaxing rare earth) plans to absorb and merge the holding subsidiary Baotou Keri rare earth materials Co., Ltd. (hereinafter referred to as Keri rare earth).

Huaxing rare earth is mainly responsible for the business of rare earth polishing powder, rare earth alloy, deep-processing products and rare earth new material products, with North rare earth holding 50.50%. By the end of the first quarter of this year, the total assets of the company had exceeded 122million yuan, and the net profit was 5.0392 million yuan. The net profit for the whole year of 2021 was 8.43 million yuan. Kori rare earth is mainly responsible for the production and sales of high value-added rare earth products and import and export business. Similarly, northern rare earth holds 50.50% of the shares, and the remaining shares are held by Huaxing rare earth; The asset scale of the latest phase is 25.1193 million yuan, about 1/5 of the scale of Huaxing rare earth; The net profit loss in the first quarter was about 320000 yuan.

Supchina said that as a state-owned enterprise, the merger of North China rare earth is part of Beijing's three-year state-owned enterprise reform process starting in 2020, which aims to improve industrial concentration, enhance competitiveness and reduce management costs. The company is one of China's largest rare earth miners, and its controlling shareholder, Baosteel Group Baotou Iron and steel (Group), has exclusive rights to EBO, Inner Mongolia, the world's largest rare earth mine.