June 19, 2019 / 1:15 PM / 4 months ago

Chinese firms plan rare earth manufacturing hub in Hebei

FILE PHOTO: A villager looks towards a rare earth smelting plant as he takes a break from shovelling cast-off tailings of crushed mineral ore that contain rare earth metals in Xinguang Village, located on the outskirts of the city of Baotou in China's Inner Mongolia Autonomous Region in this October 31, 2010 picture. REUTERS/David Gray/File Photo

BEIJING (Reuters) - A group of Chinese firms have jointly established a rare earths innovation center in the country’s Hebei province as part of a plan to develop a manufacturing base in the region, according to the local government hosting the project.

The move comes amid speculation that China, the world’s dominant rare earths producer, may use its control over supply of the group of 17 prized minerals - used in everything from consumer electronics to military equipment - as leverage in its trade conflict with the United States.

Rare earths are used in rechargeable batteries for electric and hybrid cars, advanced ceramics, computers, DVD players, wind turbines, catalysts in cars and oil refineries, monitors, televisions, lighting, lasers, fiber optics, superconductors and glass polishing.

The center in Xiongan New Area, a special economic zone around 100 km (62 miles) southwest of Beijing, groups six state-owned enterprises and seven listed firms as core shareholders, according to a statement on the local government’s website.

It will strive to build a “world-class rare earth advanced manufacturing cluster,” the statement added, noting that rare earths are playing an increasingly important role in IT, new energy vehicles, robotics and high-end medical equipment.

A separate statement on the website of Chinese rare earths producer Shenghe Resources Holding Co listed itself and others including China Minmetals Rare Earth Co as partners in the center.

China has been actively looking to develop its own downstream rare earth industries, notably in the mining center of Baotou in Inner Mongolia, a move that would reduce its reliance on exporting rare earths.

China’s state planner, the National Development and Reform Commission, confirmed on Monday that rare earth export controls had been suggested by industry experts.

Reporting by Tom Daly; Editing by Elaine Hardcastle

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