Ore containing rare earths. Hankook Ilbo file photo
It is reported that China is setting up a giant state-owned enterprise that processes and produces rare earths, a strategic commodity. It is interpreted that the Chinese side has begun to ‘weaponize resources’ by further strengthening its market dominance position.
On the 6th, Chinese media such as the Maeil Economic Daily reported that the headquarters of China Rare Earth Group, a giant that merged rare earth processing and production companies, would be established in Jiangxi Province this month. The rare earth processing and production companies subject to the merger include China Wuguang Group, China Aluminum, and Ganzhou Rare Earth Group. It is reported that the Chinese government has already approved the establishment of the company.
As a result, China’s influence in the global rare earth market is expected to increase. The paper explained that the establishment of the new company is to maintain a leading position in the global rare earth supply chain. It is expected that the establishment of a giant rare earth company will strengthen its pricing power and solidify its dominance over rare earths in the global market.
Rare earths are essential raw materials for the production of information technology (IT) products such as semiconductors and military weapons such as stealth fighters, and have a strong strategic nature. It is known that China accounts for more than 70% of the world’s rare earth production. The Chinese side’s move is expected to further enhance its market dominance.
Kim Cheong-hwan reporter chk@hankookilbo.com
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