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[Ferro-Alloys.com] China is en route to merging rare earth makers into big groups to boost competitiveness in the sector.

On Dec 13, Baogang Rare Earth Group (BREG) in North China's Inner Mongolia autonomous region, announced it will change its name into "China North Rare Earth Group Co Ltd", having made significant progress in merging with five smaller companies in the region and Gansu province.

Boasting a mine with the world's biggest reserve of rare earth, BREG dominates the Chinese market of light rare earth products, and is a leading rare earth producer and processor globally.

Other domestic competitors are also considering regrouping, with Aluminum Corporation of China and Xiamen Tungsten Co Ltd, two of the country's six giants in the sector, expected to complete a merger by the end of this year.

China is the world's largest rare earth producer and exporter, accounting for more than 90 percent of the world supply, but lacks pricing power in the global market and wild price swings have had a negative effect on producers.

The regrouping drive will help integrate resources and create a favorable environment for domestic companies, said Yang Zhanfeng, dean of Baotou Research Institute of Rare Earths.

Rare earth metals are vital for manufacturing high-tech products ranging from smartphones and wind turbines to electric car batteries and missiles.