China has formed a rare-earth conglomerate, China Rare-Earth Group, through a merger of several government-managed firms.
- The companies brought together include China and Ganzhou Rare Earth Group, Aluminium Corporation of China, and China Minmetal Rare Earths Corporation.
- The development aims to optimize resource allocation and enhance green development in the rare-earth sector.
- China’s Asset Supervision and Administration Commission would have 31.21% ownership of the new group, while China Minmetals and Chinalco would own a 20.33% stake each.
- China is reportedly planning to set up two behemoth firms, one in the northern part of the country and another in the South for different productions. The country currently controls a big part of the global rare earth output.
- The stocks of China Minmetals jumped 8.5% in Shenzhen, and that of the Aluminium Corporation of China is up over 5% in Shanghai.
Rare earths are 17 elements used as inputs in the industrial manufacture of items like smartphones and fighter jets.
606600: SHA is down -5.44%, 000831: SHE is down -9.98%Source: Bloomberg