Chinese Rare-Earths Producer Acquires Mining Firms | Popplet
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NYTimes | BEIJING — China’s biggest producer of rare earths, the Inner Mongolia Baotou Steel Rare Earth Group, has acquired nine regional mining companies as part of a government plan to consolidate the sector.
China produces more than 90 percent of the world’s rare earth metals, a group of 17 elements used in a wide range of applications, in sectors like renewable energy, telecommunications and defense.
Since 2010, China has tried to improve industry regulation, imposing tough production and export quotas, raising environmental standards and cracking down on smuggling, once the source of nearly a third of the rare earths flowing to international markets.
China has also sought to consolidate mining companies under the control of a small number of state-owned producers.
Baotou Rare Earth said in a statement issued to the Shanghai Stock Exchange on Friday that it had signed an agreement with the Inner Mongolian government to acquire the nine companies.
According to the agreement, Baotou Rare Earth will receive 51 percent stakes in each of the companies at no cost. Baotou Rare Earth will help the companies integrate into its management system and comply with tougher environmental and technological standards before the acquisitions are completed.
Baotou Rare Earth will also help the companies’ secure export and production quotas, the statement said. Shares in Baotou Rare Earth closed 3 percent higher Friday, after rising more than 9 percent during the day.
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