The state-owned Assets Supervision and Administration Commission (Sasac) of China's Gansu provincial government has reached a strategic agreement for state-owned Northern Rare Earth to re-merge with Gansu Rare Earth New Material.
After the amalgamation, Northern Rare Earth's total stake in Gansu Rare Earth will rise to 49.35pc from 5pc in 2015, making it the largest shareholder. Gansu Provincial State-Owned Asset Investment Group and Gansu Industry and Transportation Investment, as subsidiaries of Sasac, hold 26.96pc in Gansu Rare Earth.
The re-merger of Gansu Rare Earth New Material reflects China's pro-merger and integration policy. It aims to promote supply-side structural reform and tackle the shortage of rare earth resources. Gansu province will accelerate its start-up of Rare Earth Industrial Park in Baiyin Liuchuan Industrial District.
Northern Rare Earth is China's largest rare earths supplier. It is expected to report a significant rise in 2017 profits — to Yn320mn ($50mn) from Yn40mn in 2016. The company attributed this to higher rare earth prices and sales growth resulting from environmental regulations and crackdowns on unauthorised production.
Gansu Rare Earth New Material is China's largest rare earth smelting and separation company. It has production capacity for 30,000 t/yr of rare earth concentrates, 2,500 t/yr of abrasive materials, 2,500 t/yr of rare earth metals, 1,200 t/yr of hydrogen storage materials, 2,000 t/yr of neodymium-iron-boron magnet materials and 100 t/yr of luminescent materials.
