The government has approved two major rare earth producers to become conglomerates by the end of this year in order to further consolidate the rare resources, combat smuggling and alleviate overcapacity in production.

Xiamen Tungsten Co Ltd and Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co have been approved by the Ministry of Industry and Information Technology to form the two rare earth groups.

Xiamen Tungsten will integrate rare earth mining, separating and manufacturing within Fujian province in the south, excluding what is owned by China Minmetals Corp by the end of 2014.