On December 6, some media reported that China had approved the establishment of the world’s largest rare earth company. The move aims to maintain its leading position in the global supply chain of rare earths. The company will be named China rare earth group and will be established in Jiangxi Province as soon as this month.
Affected by this news, the A-share and Hong Kong stock Rare Earth concept sectors were sought after by funds in early trading on the 6th. Hong Kong shares of China rare earth once rose 18.18%, up 16.88% to close at HK $0.9 per share. A-Shares Aluminum Corporation Of China Limited(601600) closed the trading limit 45 minutes after the opening. As of the closing, they closed at 5.93 yuan / share, with a trading volume of 6.6135 million hands and a total market value of 100.9 billion yuan. China Minmetals Rare Earth Co.Ltd(000831) closed up 2.44% to close at 50.05 yuan / share.
According to the previous announcement of China Minmetals Rare Earth Co.Ltd(000831) , on September 23, 2021, China Minmetals Rare Earth Co.Ltd(000831) received a notice from China Minmetals Group Co., Ltd. and is planning the strategic reorganization of relevant rare earth assets. The relevant scheme has not been finalized and needs to be approved by the relevant competent authorities.
On December 6, the reporter of Securities Daily learned from Ganzhou rare earth group that this was indeed the case. “China rare earth group is expected to be listed at the end of December. At present, the financial merger has been almost completed, and the whole thing is moving forward very quickly.” An industry source who declined to be named told reporters.
It is rumored that Chinalco group took the lead. However, when the reporter of Securities Daily asked the company to confirm the matter, the company said that it had not received relevant information at present. However, the reporter of Securities Daily noted that previously, Chinalco group had been integrating its internal assets, which seemed to be preparing for the reorganization of rare earth assets. On August 24 this year, Aluminum Corporation Of China Limited(601600) announced that it planned to acquire gallium assets of China rare earth Co., Ltd. at a price of 392 million yuan.
The above insiders also disclosed to reporters that the development strategic objectives of the newly established China rare earth group have not been fully determined. Many market participants agreed that China rare earth group is expected to become an “aircraft carrier” company in the rare earth mining industry. Expanding the rare earth pricing power and improving the rare earth discourse power are the main tasks of the company, and the possibility of each organizing unit or taking shares in assets is the greatest.
China is the only country with rare earth industry chain in the world, and ranks first in rare earth reserves, output, smelting separation, consumption and export. However, after years of development, resources are rapidly consumed. According to the data, after years of intensive development, China’s rare earth resources reserves have decreased from 55 million tons in 2013 to 44 million tons, accounting for 38% of the world’s total.
In terms of rare earth resources, China is undoubtedly a large producer and supplier, but the price of rare earth once sold the “cabbage price” for a long time. For example, praseodymium and neodymium oxide was once as low as 130000 yuan / ton. In 2010, due to the continuous tightening of the production and export scale of rare earth, the price of rare earth has gradually increased on the whole, especially the rapid development of new energy industry in recent years and the continuous expansion of demand for rare earth resources, resulting in the price of rare earth standing at a historical high in the past nine years.
According to the data of business society, the rare earth index on November 30 was 793 points, an increase of 11 points compared with the previous day, a decrease of 20.70% compared with the highest point of 1000 points in the cycle (2011-12-06), and an increase of 192.62% compared with the lowest point of 271 points on September 13, 2015 (Note: the cycle refers to the period since 2011-12-01).
“In the future, the global demand for rare earth is likely to soar. In this case, the vicious competition among rare earth enterprises must be solved.” Li Jin, chief researcher of China Enterprise Research Institute, told the Securities Daily that China is a large country of rare earth resources. However, for a long time, China’s rare earth industry has faced problems such as low-level competition, disorderly mining, low-cost sales and lack of core technology. The establishment of a large-scale rare earth group is conducive to reducing the vicious circle.
“In addition, for a long time, China has directly exported rare earth raw materials, rarely processed into industrial products, and has no pricing power. After the establishment of China rare earth group, we can strengthen the control over the import and export of rare earth resources and strengthen the voice and competitiveness. More importantly, we should strive to fundamentally improve the investment in science and technology and core technology.” Li Jin added.
Tan Haojun, a financial commentator and part-time professor of Zhongnan University of economics and law, also told reporters that the establishment of China rare earth group is conducive to better protect rare earth resources and organize the mining, export and use of rare earth. In particular, we can’t export all good rare earths, and control the price at the same time. We’d rather not export, but also ensure the price.
It is understood that with the consumption of rare earth resources in China and the implementation of rare earth mines and smelting separation projects in the United States, Australia and other countries, the global rare earth resource pattern and development pattern may face new changes. In order to achieve high-quality development of rare earth industry in China, it is necessary to build large rare earth enterprise groups with international influence, such as “aircraft carrier” in mining industry and upstream and downstream integration.
Rare earth assets of several state-owned enterprises will be re integrated? China Minmetals Rare Earth Co.Ltd(000831) responded that “the restructuring plan has not come out”
Ganzhou rare earth related people confirmed that China rare earth group will be established
(Securities Daily)
