Jan. 3 (Bloomberg) -- Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co., China’s biggest producer, gained the most in a month in Shanghai after its parent signed restructuring agreements with nine other companies in the region.
The stock rose 3 percent, the most since Nov. 28, to close at 22.80 yuan. That compares with a 1.2 percent decline in the benchmark Shanghai Stock Exchange Composite Index.
China, the world’s majority supplier of the elements used in batteries and hybrid-electric cars, is seeking to consolidate the industry and crack down on illegal production. The nation has approved a plan to set up “large” rare earth groups that will oversee the industry’s development and get government policy support, the Economic Information Daily reported today, citing an unidentified person.
“Baotou Steel is responsible for the industry’s consolidation in the northern region,” said Li Xiaolu, a Shanghai-based analyst with Capital Securities Corp. The plan reported in the Economic Information Daily would add to major policies already announced for the industry, Li said.
Rising Nonferrous Metals Share Co. also gained in Shanghai, advancing 1.5 percent. Aluminum Corp. of China Ltd. gained 0.6 percent.
Baotou Steel Rare-Earth said yesterday in a statement its biggest shareholder Baogang Group signed accords on Dec. 31 with nine upstream companies which will be included in Inner Mongolia’s rare earth franchise system. Baotou Steel aims to hold controlling stakes in the companies after helping them with operations, financial management and environmental protection.
The company first announced the plan in December 2012, when it said it will get controlling stakes in 12 firms.
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