The Aluminum Corporation of China Ltd (Chinalco) is getting into a joint venture involving rare earths. The company is set to buy a controlling stake in the rare-earth subsidiary of the state-owned Guangxi Nonferrous Metals Mining Group.
Li Yangtong, the chairman of Guangxi Nonferrous said that the companies had signed a preliminary agreement for access to resources in the Guangxi Zhuang autonomous region. Chinalco, Guangxi Nonferrous and Grirem Advanced Material Company are to establish the joint venture.
The joint venture will develop the rare earth resources that are owned by Guangxi Rare Earth Development Company or GRED, which is a subsidiary of Gaungxi Nonferrous Metals Mining group. It will be owned 50% by Chinalco, 40% by Guangxi Nonferrous and 10% by Grirem Adanced Material company.
Guangxi Rare Earth Development Company has two or three mining rights through which it can access local rare earth resources as per a company insider who preferred to remain anonymous. He also said that the company was suspended from issuing rare-earth export quotas in the first half of this year, but hopefully, after the cooperation with Chinalco, it will regain the quota in the second half of this year.
Chinalco has been able to gain access to the rare earth resources in Guangxi due to strong government backing. The central government is keen on large companies consolidating the rare earth sector in the nation. Rare earths are a group of minerals consisting of 17 elements. These rare elements are used in a number of high-tech areas, such as wind turbines, missile guidance systems, hybrid-car batteries and other such products.