BEIJING, May 19 -- China Minmetals Corp. plans to spend at least 4.5 billion yuan ($659 million) over five years to explore for rare earth, tungsten, tin and bismuth in Hunan province, state-run Xinhua News Agency said.
Minmetals signed an agreement with the Chenzhou city government in Hunan for strategic cooperation, the report said today, without giving details. He Jinglin, an official at the communications department of China's largest metal trader, said he is unaware of the report and couldn't comment.
The move may be another step by state-owned Minmetals to consolidate minor metal and rare earth resources in China to gain pricing power. The company in December agreed to pay 5.6 billion yuan for 51 percent of Hunan Nonferrous Metals Holding Group Co., the nation's biggest tungsten and zinc producer.
Chenzhou, located in southern Hunan and bordering Guangdong, has the most reserves of tungsten, bismuth, tin and zinc among Chinese cities, Xinhua said.
China has established production quotas and limited exports of rare earth and some minor metals to bolster prices and ensure domestic supplies. Rare earth and minor metals are widely used in electronics and military weapons including naval radar and night-vision goggles.
China controls more than 90 percent of the world's rare earths, and is the largest producer of minor metals such as tungsten and antimony.