Economy
Biggest players to rule rare earth sector
By Zhou Yan and Zhang Qi (China Daily)
Updated: 2011-05-20 09:19
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BEIJING - The Chinese government is planning to tighten its grip on rare earth minerals by letting the biggest domestic players dominate the industry within two years, according to the State Council, the nation's cabinet.
That's as the authorities pave the way for sustainable growth in the industry.
The top three domestic conglomerates in the ion-absorbed type rare earths sector in the south of the country are also set to hold more than 80 percent of the market share over the same period, said the State Council, in a document issued on Thursday, without specifying the names of the companies.
However, an official from Ganzhou Rare Earth Mining Co in Jangxi province, which has the nation's biggest reserves of ion-absorbed type rare earths, said the company has yet to receive any notice from the central government.
But the official, who requested not to be named, speculated that China Minerals Corp and Aluminum Corp of China Ltd may be among the three enterprises, given their strong positions in South China's rare earths industry.
Ion-absorbed type rare earths, or medium and heavy rare earths, are more valuable than the lighter version because of more scarce reserves and their wide use in the more advanced areas of technology, said Lin Donglu, secretary-general of the Chinese Society of Rare Earths.
The document also noted that the government will raise the qualification standards for rare- earths exporters and strengthen supervision of existing exporters. It specifically pointed out that China will strictly control the export of primary products such as rare earth metals, oxides, salts and ferroalloys, amid heavy curbs on exploration and production of those minerals.
"It's a signal that the government's determination to protect the metals is stronger than we expected. The development of the entire industry chain has been considered strategically," Lin said.
The government's paper came after an announcement in February that it will impose more stringent mining policies and environment standards for the minerals in tandem with the establishment of "reasonable" production and export quotas.
China, the world's biggest producer of rare earth elements, which supplies 95 percent of the world's total, planned to slash its exports quota for the minerals by about 35 percent in 2011, the Ministry of Commerce said in December.
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