BEIJING -- Two major Chinese rare-earth companies will work together to bolster a supply chain for industrially vital metals that can be used to put economic pressure on the U.S. and other nations.
China Northern Rare Earth (Group) High-Tech, a state-owned enterprise, has agreed to form a strategic partnership with Hong Kong-listed private-sector counterpart China Rare Earth Holdings. China Northern announced the deal on Sunday.
The timing of the announcement suggests the partnership is in line with a government plan to create a rare-earth supergroup by merging state assets. This highlighted a meeting on Saturday by the State-owned Assets Supervision and Administration Commission.
China produces 60% of the world's rare earth metals, according to data from the United States Geological Survey, giving the country a grip on the supply of essential ingredients in powerful magnets and other components of both consumer and military technology.
Chinese President Xi Jinping in 2019 described rare earths as "important strategic resources." Beijing plans to consolidate rare-earth subsidiaries owned by China Minmetals Corp., Aluminum Corp. of China and the government of Ganzhou city.
China Northern, which is controlled by the government of Inner Mongolia through a steelmaker, manufactures and sells rare-earth products. It reported a net profit of 800 million yuan ($125 million) for 2020 on revenue of 21.2 billion yuan.
China Rare Earth reported a net profit of 19 million Hong Kong dollars ($2.4 million) on HK$1.1 billion in revenue.
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