China Baotou Rare Earth acquires nine regional miners
BEIJING (Reuters) - China's biggest producer of rare earths, the Inner Mongolia Baotou Steel Rare Earth Group (600111.SS), has acquired nine regional mining companies as part of a government masterplan to consolidate the sector.
China produces more than 90 percent of the world's rare earth metals, a group of 17 elements used in a wide range of applications in sectors like renewable energy, telecommunications and defense.
Since 2010, it has tried to improve industry regulation, imposing tough new production and export quotas, raising environmental standards and cracking down on smuggling, once the source of nearly a third of the rare earths flowing to international markets. It has also sought to consolidate miners under the control of a small number of state-owned producers.
Baotou Rare Earth said in a statement issued to the Shanghai Stock Exchange on Friday that it had signed an agreement with the Inner Mongolian government to acquire the nine upstream firms.
According to the agreement, Baotou Rare Earth will receive 51 percent stakes in each of the companies at no cost.
Baotou Rare Earth will help the firms integrate into its management system and comply with tougher environmental and technological standards before the acquisitions are completed, and will also help them secure export and production quotas.
Shares in the firm were up by more than 9 percent in Friday morning trade.
(Reporting by David Stanway; Editing by Richard Pullin)