China Minmetals Rare Earth Co. said on Wednesday it would merge with China’s two other top rare earth producers into a new company under the state assets regulator which will create a global giant in the strategic industry.

China is the world's dominant producer of rare earths which includes a group of 17 minerals that are used in consumer electronics and military equipment. The move to consolidate its "Big Six" state-run rare earth companies have been seen as a way to boost its influence over pricing.

Minmetals Rare Earth said in a filing its parent had been notified by the State-owned Assets Supervision and Administration Commission (Sasac) that the merger had been approved. It will see the equity of Minmetals Rare Earth, Chinalco Rare Earth & Metals Co and China Southern Rare Earth Group Co transferred into a new company.

Jiangxi Ganzhou Rare Metal Exchange Co and Ganzhou Zhonglan Rare Earth New Material Technology Co will also be folded into the new entity.

Both Minmetals Rare Earth and China Southern Rare Earth Group are headquartered in Ganzhou which is a heavy rare earths hub in southern China's Jiangxi province.

"This announcement ... will consolidate the majority of China's heavy rare earths capacity," CRU Group consultant Daan de Jonge said. He added, "This will mean that the pricing power of key rare earths, such as dysprosium and terbium, will be in the hands of one 'super group'." Dysprosium and terbium are key inputs for rare earth magnets, used in everything from electric vehicles to wind turbines.

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