China Minmetals plan to form a national rare earth industrial group approved
China Stockpile China Minmetals Corporation confirmed on December 3th that the government had approved its plan to form a national rare earth industrial group, aims to further consolidate the country’s rare earth sector, speeding up clearance of illegal practices and mining operations and alleviate overcapacity in production.
The Ministry of Industry and Information Technology gave permission for a wholly owned subsidiary of CMC, China Minmetals Rare Earth, to integrate rare earth mining, separating and utilization of rare-earth minerals in the six southern provinces including Hunan, Yunnan, Jiangxi, Fujian, Guangdong and Guangxi.
China Minmetals Rare Earth is now the world’s biggest middle and heavy rare earths producer, owning a complete rare earth industry chain from upstream to downstream, which controls 31 various rare earth companies at home, of which includes 7 rare earth separation plants, one exploration right, three mining rights, one research institute of rare earths and various rare-earth product deeply processing enterprises, respectively.
In early January this year, China’s central government approved a plan to consolidate the country’s rare earth industry plagued with smuggling and overcapacity.
According to the plan, six state-owned rare earth giants, including Chalco, China Minmetals Corporation, Xiamen Tungsten, Guangdong Rare Earth Group, the Inner Mongolia Baotou Iron & Steel (Group) Company Limited and Ganzhou Rare Earth Group, which will be formed to have an overall control of the rare earth resources and the smelting and separating capacity of rare earth in China.
Mr Jia Yinsong, director of the MIIT’s rare earth office said that “Currently, the six rare earth groups control 94 percent of China’s total rare earth resources and 75 percent of the mines. Meanwhile, the smelting and separating capacity of the six groups account for nearly 60 percent. But after the consolidation, all these will be controlled by the six groups, in addition to fighting illegal production, smuggling and cutting overcapacity.”
Mr Jia said that The consolidation is only the first step, which is focused on the upstream section of the rare earth industry. Although China is the world’s largest rare earth producer and exporter, however, there are still many specific issues to be addressed based on the completed plans, such as a lack of competitiveness due to weak research and development.
Source – Investor Intel