China presently has a near monopoly on 'Rare' Earth minerals 90% of which come from there. China reduced exports of these metals by 40% in 2009.
Rare earth metals such as Neodymium are becoming increasingly important with the development of more efficient electric vehicles as they are required to make powerful permanent high density magnet composites (HDMC). A typical electric automobile will contain over 1kg of this metal.
Chinese government owned Chinalco has signed a memorandum with Guangxi Non-ferrous Metals (Group) Corporation on jointly developing rare earth resources in Guangxi.
According to the memorandum, the two sides will set up a joint venture to develop local rare earth resources and refining of these. Chinalco will have the controlling interest.
Guangxi Non-ferrous has a 55% stake in Jinyuan Rare-earth Co, Ltd, the only company that has rare earth mining right in the region. Guangxi Non-ferrous has planned to inject about RMB 3bn (US$454M) into Jinyuan Rare-earth to facilitate the construction of six projects, and another RMB 2.5bn ($378.5M) to consolidate resources outside of Guangxi. All these projects are expected to be carried out by the joint venture.
Apart from Guangxi, Chinalco is also developing rare metals in Jiangxi and aims to develop rare earth resources in Guangdong.
Greenland offers the main alternative source of Rare Earth metals but currently these resources remain largely undeveloped