The budding of China's six rare earth conglomerates
Staff Reporter 2014-08-21 11:03 (GMT+8)
A rare earth mining site in Xinfeng county, Jiangxi province. (File photo/Xinhua)
A rare earth mining site in Xinfeng county, Jiangxi province. (File photo/Xinhua)
China has accelerated the push to form six large rare earth conglomerates in a bid to improve its hobbled and scattered development of the industry. Three have already been approved by the government and three more are expected to get the green light by the end of this year, reports the Beijing-based Economic Information Daily.
Xiamen Tungsten, Inner Mongolia Baotou Steel Rare Earth Hi-Tech, and the Aluminum Corporation of China Limited (CHALCO) have all won government approval.
Baotou Steel is focusing on the integration of rare earth firms in northern areas of China, including Inner Mongolia and Gansu. Xiamen Tungsten aims to integrate Fujian's rare earth producers and CHALCO is targeting Jiangsu, Guangxi, Sichuan and Shandong provinces. The three others are likely to integrate Jiangxi, Guangdong and Hunan.
In the process of forming large-sized rare earth conglomerates, the government has insisted on using policy and government guidance, leading management, diversified investments and marketization to ensure real integration based on capital formation and a modern enterprise system, said Jia Yinsong, director of the rare earth office at the Ministry of Industry and Information Technology (MIIT).
The government plans to gradually realize the three major links within the rare earth industry: exploration of rare earth mines, smelting separation and utilization.
By forging large-sized rare earth conglomerates, the government hopes to buy some credit in the global market while hitting environmental protection goals, said one unnamed authority.
Once the six giant enterprises are formed, they can adjust their production volume and prices of rare earth according to market supply and demand, which would make the government invulnerable to lawsuits filed by countries in the WTO, the source said.
Currently, China's rare earth reserves mainly spread across Inner Mongolia, Shandong, Sichuan, Jiangxi, Fujian and Guangdong, with most of the producers very small in size. In 2013, China had more than 100 rare earth producers with a total production of about 300,000 tons.
Only five companies mining the Neodymium magnet (also known as NdFeB, NIB or Neo magnet), the most widely used type of rare earth magnet, have an annual production surpassing 3,000 tons, out of nearly 200 NIB makers.
NIB is a permanent magnet made from an alloy of neodymium, iron and boron to form the Nd2Fe14B tetragonal crystalline structure. Since it was founded in 1983, NIB has been widely applied in electric engineering, wind power, automotive and electro-acoustic fields. China has invested heavily in the development of NIB and its uses.
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