REE prices will spike by year end. Here is why.

China’s government revealed it had approved the creation of two regional REE monopolies with the mergers to take place by the end of this year.Inner Mongolia Baotou Steel Rare-Earth Hi-Tech. Co. and Xiamen Tungsten Co. Ltd. said they have been approved by the Ministry of Industry and Information Technology to lead the formation of the two REE groups, one in the north and the other in the south, reported China Daily.Baogang Group, Baotou’s parent, will handle the establishment of China North Rare Earth High Tech, consolidating mining, smelting, separation and utilization companies in the Northern region of Inner Mongolia and will include Gansu Rare Earth Group.Xiamen Tungsten will build a conglomerate covering the southern part of the country with all related REE companies in Fujian Province except for state-owned China Minmetals by year-end.The organization of these big conglomerates is viewed to be only the first step toward consolidation of the rare earth industry.