The Aluminum Corporation of China (Chinalco), the country's top mining company, said Monday it has signed an agreement to assume a major stake in the Jiangxi Rare Earth and Rare Metals Tungsten Group (JXTC) for 10 billion yuan (US$1.5 billion).

Chinalco, keen to become one of the world's leading rare earth companies, will help JXTC develop rare earth resources in the next three to five years, according to the agreement, which was signed Sunday at the Expo Central China 2010.

The Nanchang-based JXTC is China's largest tungsten producer and maintains rare earth resource deposits in Jiangxi Province.

The agreement came after China's announcement early this month that it would encourage mergers and acquisitions in the rare earth sector to quicken industry consolidation. According to media reports, the government planned to cut the number of rare earth firms from the current 90 to 20 by 2015.

China is the world's largest rare earth producer, supplying more than 90 percent of the global demand.

(Xinhua News Agency September 28, 2010)