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China mining giants to align rare earth prices

BEIJING -- Two Chinese mining giants are set to align their prices for light rare earths nationwide in a move that will give China more influence over international markets, state media reported Tuesday.

The cooperation will allow Baotou Steel High Tech Co — the supplier of 46 percent of the world's rare earth oxides — and Jiangxi Copper Corp to "virtually control" market prices, the China Daily cited analysts as saying.

"Enhancing the concentration of the rare earth sector will benefit the Chinese side and give it a bigger say in the global markets," Yu Zhongsen, former Chinese Society of Rare Earths secretary-general, was quoted as saying.

Jiangxi Copper is also planning to consolidate resources with two partners in the southwestern province of Sichuan, the second-largest source for light rare earths after Inner Mongolia, where Baotou is based, the report said.

China supplies at least 95 percent of the world's rare earths — 17 chemical elements essential for the making of iPods, wind farms, electric cars, missiles and a wide range of other products.

Foreign companies and governments fear China's efforts to control the rare earths market, if implemented, will deny them access to the much-needed metals and force manufacturers to shift their plants to China.

China's efforts — which include cutting export quotas, industry consolidation and crackdowns on illegal mining — had already driven prices higher, the report said.

For example, the price of neodymium — a magnetic material used in headphones and hard drives — has risen 60 percent since the end of last year to US$32,000 a tonne in August.

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