Norms to prevent monopoly of rare earth industry

Improve the rare earth industry, industry concentration, and only in a fair and reasonable competition in the market resulting concentration of the rare earth industry in order to improve labor productivity in order to make China's rare earth industry reasonably healthy and sustainable development.

According to the State Ministry website Wednesday announced that the Ministry of Public Security, Ministry of Land Resources, Ministry of Environmental Protection, General Administration of Customs, State Administration of Taxation, the State Administration of Production Safety Supervision and Administration for Industry and other eight ministries jointly issued a document, will be closed from 2013 on 15 August to 15 November, a nationwide campaign against rare earth mining, production, circulation of illegal special action. After the news broke, rare earth permanent magnet stocks collective rose.

More than 90% of global rare earth resources from China in the past 20 years, China's rare earth industry in international trade not only no pricing power, resources will be sold "cabbage price." While large-scale mining since 1992, rare earth mining on the local ecological environment destruction and serious waste of resources.

China Rare Earth Industry remediation chaos has been for some time, yet close to the Chinese rare earth resources in a reasonable, objective benign industrial use there is considerable distance. So this time it is necessary to focus on remediation.

The main task of special rectification actions include checking the implementation of the local government territorial mandatory production plan, mining quota of total control, environmental verification, production safety, VAT invoices and other rules and regulations to implement and so on. To this end eight ministries established six priorities and requirements.

Generally, this six priorities and requirements are in line with this special rectification action total requirements. However, there are two points which I think is debatable, but these two points on the rare earth industry, China's market economy is not irrelevant.

In order to regulate the rare earth industry, eight ministries and quasi-pinching vital, "focus on verification smelting enterprises mineral source separation, focus on examination of trade enterprises purchase and sale of rare earth minerals." But it is to "guide the rare earth mineral mining enterprises will be sold directly to a smelting separation plan targets enterprise", and even that is actually required of rare earth mineral mining enterprises must be sold to a business plan targets smelting and separation.


Chinese rare earth enterprises currently have mandatory plan, but China's rare earth industry basically should still implement market mechanisms. The "boot" or requirements upstream companies to sell their products to the specified downstream businesses, according to China's "anti-monopoly law," is part of the nature of vertical monopolies. Therefore there is a need to change these require "rare earth mineral mining enterprises must be sold to legal compliance and downstream enterprises."

Remediation China's rare earth industry, no doubt have to raise the rare earth industry, industry concentration. However, such a set, only in a fair and reasonable competition in the market resulting concentration of the rare earth industry in order to improve labor productivity in order to make China's rare earth industry reasonably healthy and sustainable development. Developed by a centralized administrative intervention, mostly the product of the planned economy, resulting in a small number of state-owned monopoly. Contact to the previous two years, the state will specify the North and the South twenty-three state-owned monopoly of rare earth industry rumors, this is the need for vigilance. Do not eliminate the confusion of rare earth industry, the eradication of rare earth "cabbage price", and the emergence of monopolies and rare earth industry products exorbitant "monopoly price."


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