(Yicai Global) Sept. 23 -- Xiamen Tungsten is joining forces with Chifeng Jilong Gold Mining to develop rare earth deposits in Laos, China’s largest tungsten producer said yesterday.

A joint venture with a registered capital of CNY60 million (USD8.5 million) will be set up to run the project, Xiamen Tungsten said. Chifeng, northern Inner Mongolia Autonomous Region-based Chifeng Gold will hold 51 percent equity in the JV and Xiamen Tungsten the rest. The two firms will be given first choice of the rare earth products.

Although no mention was made of the rare earth deposits that they are targeting in Laos, a unit of Chifeng Gold has exclusive exploration and mining rights to a 1,247 square-kilometer region in the Southeast Asian country, including the Sepon mine, Chifeng Gold said last month.

Participating in the project will help Xiamen Tungsten to participate in the development of rare earth resources in Laos, optimize the rare earth industry layout and is in line with the firm’s strategic planning and business development needs, the Xiamen, southeastern Fujian province-based company said.

Xiamen Tungsten operates the most complete tungsten industrial chain in China. It is mainly engaged in the research and development as well as production and sales of tungsten concentrate, intermediate products of tungsten and molybdenum, rare earth oxides, rare earth metals and various new materials, as well as property developing and operating.

Chifeng Gold is one of the largest gold mining groups in China and is involved in the mining and purification of precious metals, including gold and copper, as well as non-ferrous metals.

Their stock was little affected by the news. Chifeng Gold’s share price [SHA:600988] dipped 0.2 percent to finish the day at CNY21.54 (USD3) while Xiamen Tungsten’s shares [SHA:600549] closed down 2.3 percent at CNY23.58.

Editor: Kim Taylor