China established a new state-owned rare earths giant in the southern province of Jiangxi through a merger of three of the country's top rare earths companies, Xinhua reported Dec. 23.

China Rare Earth Group was formed from the rare earths business of three state-owned companies, namely Aluminum Corporation of China unit Chinalco Rare Earth & Metals Co. Ltd., China Minmetals Corp.'s China Minmetals Rare Earth Co. Ltd. and Ganzhou Rare Earth Group Co. Ltd.-controlled China Southern Rare Earth Group Co. Ltd., according to a Dec. 22 filing by China Minmetals Rare Earth.

The three companies will each control 20.3% of the new entity, state broadcaster CCTV reported Dec. 23.

The State-owned Assets Supervision and Administration Commission of the State Council, or SASAC, is the biggest shareholder, with a 31.2% stake. Two research firms, China Iron & Steel Research Institute Group and Grinm Group Corp., each hold a 3.9% stake.

The merger aims to integrate upstream resources, increase China's pricing power in the global market, and use rare earths to the country's strategic advantage, CCTV reported, citing Hao Peng, head of SASAC.

China Rare Earth Group is poised to become the country's second-largest rare earths producer after China Northern Rare Earth (Group) High-Tech Co. Ltd. The new entity would be able to produce about 45,000 tonnes of rare earth oxides yearly, Roskill manager David Merriman told Reuters.

China Minmetals had negotiated the restructuring of its rare earths business with Chinalco and the city of Ganzhou, which controls 94% of China Southern Rare Earth, in September.

China is the world's largest producer of rare earths, accounting for more than 70% of global supply in 2018, according to the Center for Strategic and International Studies.