Central Government-owned enterprises are taking over the local state-owned rare metal and rare earth companies and building large conglomerates to compete for global pricing power over these resources, Xinhua reported.
On September 26, 2010, the Aluminum Corporation of China (Chinalco) signed an agreement to assume a major stake in the Jiangxi Rare Earth and Rare Metals Tungsten Group (JXTC) for 10 billion Yuan ($1.5 Billion). Chinalco will spend that money over 3 years to make JXTC an enterprise with 50 billion Yuan in revenue each year. In May this year, China Minmentals Corporation signed a contract to invest 4.5-5.5 billion Yuan on tungsten and rare earth production in Chenzhou City, Hunan Province. Its subsidiary, China Minmetals Rare Earth Co., Ltd., announced in February 2009 that it would invest 2 billion Yuan to build the world’s largest rare earth enterprise group, which would cover mining, processing, and application.
China has the world’s largest Tungsten reserve, production, and sales volume, but it does not control the global Tungsten price due to price competition among Chinese production companies and low value-added products.
Source: Xinhua, September 27, 2010