China's No. 1 rare earths producer, the Inner Mongolia Baotou Steel Rare Earth Group, has acquired nine regional mining companies through a masterplan by Beijing officials to consolidate the sector. The mainland produces more than 90% of global supplies.

Since 2010, China has sought to enhance regulation, imposing strict new production and export quotas, elevating environmental standards and cracking down on smuggling--once the source of 30% of rare earths for worldwide markets. Beijing has also consolidated miners under the wing of a small group of state-owned producers.

Under the agreement, announced in a statement at the Shanghai Stock Exchange, Baotou Rare Earth will receive 51% stakes in each of the companies without cost. Baotou Rare Earth, in addition, will help the firms integrate into its management system while complying with tighter environmental and technological standards; the new arrangement will also herald new export and production quotas.

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