RE integration into the deep water north and south companies face different game pattern

Looking at the pattern of rare earth industry throughout the South , has been formed with a central rate local businesses coexist ; while the north although a single large, but there are still problems to be solved . Recently, Rising colored announcement that the non- public offering of 1380.07 million shares, 500 million yuan to raise funds to acquire a number of options proposed . The non-public offering to acquire equity issue, the industry has been interpreted as the Southern Rare Earth integration further ahead.

For the current six groups established, these insiders told reporters: "Six Group established inside opened the prelude to deep integration , but also opened the door to outside competition . Internal integration involves the most practical interests, participate in integrated enterprise to face index distribution , market competition , and many other problems, and external competition means that the future of '1 +5' pattern or there are variables . "

Southern Rare Earth Integration: the central rate of the local fight

In just the last in 2013 , the rare earth industry situation has not improved operating falter . On the demand side , the pattern has not changed oversupply , as of the third quarter of 2013 , Baotou Steel Rare Earth , Rising Nonferrous and other leading companies in the industry profitability continued to deteriorate in the fourth quarter, will inevitably lead to rare earth prices to fall each company can not let the capital market to produce satisfactory results for the respondents .

Although now supports Steel, Minmetals , the aluminum construction of large rare earth group 's message has been flooding the market , but in fact in the past two years, the integration process is not rare is not successful, the six Group and local governments and businesses to be integrated Game between endless.

" From a national point of view, Inner Mongolia, Shandong , Fujian, Jiangxi , Guangdong, Hunan attribution of rare earth resources division has settled, but the Sichuan, Yunnan still uncertain , resource contention or further turmoil , " brokerage analysts said .

From the current perspective , Guangdong Province , Guangdong Rare was founded in February 2012 , the same year in December , the Guangdong provincial government announced the " rare integration " and proposed to Guangdong as the main rare earth , rare earth resources in the province to integrate . Meanwhile from the Ministry on January 8 meeting passed a message to see , the same shoulder , Guangdong Province, Guangdong Rare Earth Rare Earth integration task, but the Guangdong province of four rare earth mining permit all legitimate Rising colored rests in the hands .

At present , Guangdong Rising Nonferrous and rare earth belong Rising Assets Management Co., a subsidiary of the two sides is associated enterprises. In accordance with the provisions of the Commission , the parties can not compete with the business relationship with the industry, the elimination of intra-industry competition has become an unavoidable problem .

And to solve the competition in the industry, only two may be the way to go : Guangdong or the future integration of rare earth rare earth assets into the Rising colored , and ultimately achieve backdoor listing ; Or Rising colored rare earth rare earth business transferred to Guangdong , become a non- rare earth business listed companies.

Guangdong Rising Nonferrous and a rare earth regardless of the outcome of Enter the Dragon inevitable.

Looking at the pattern of rare earth industry throughout the South , in fact, has formed a local business with the central enterprises coexist . Baotou Steel Rare Earth , Rising colored , Ganzhou Rare Earth , Xiamen Tungsten and other resources for local businesses to grasp the link to group integration, while Minmetals and through mergers and acquisitions in the downstream aluminum smelting separation and processing industries , and gradually penetrate upstream.

Mid-July 2011 , Guangxi Rare Earth Development Co., Ltd. aluminum inaugurated , Chalco Guangxi layout. Minmetals Minmetals Rare Earth Group, which owns Founded in October 2008 , the current master of the 14,000 tons per year of rare earth smelting and separation capacity.

"There is no doubt that the future integration of rare earth will become increasingly fierce competition in the South . Some media reported that the parties are now competing for the rare earth resources in Sichuan province , but there is a listed company in Sichuan Sheng and resources , as well as Leshan Institute of Rare Earth New Materials Co. , foreign enterprises to integrate difficult to imagine. "There are people in the industry said on condition of anonymity .

Rare northern Integration: involves many stakeholders

In early January, Baotou Steel Rare Earth announced that nine companies and their shareholders undertake to accept and submit to the management system by the Baotou Steel Rare Earth Group specializing in Inner Mongolia People's Government and relevant departments to develop , in strict accordance with the national mandatory plan for production operations .

It is worth noting that by the end of December 2012 , the Inner Mongolia Baotou Steel Group and 12 upstream rare earth companies signed a "rare earth upstream integration and restructuring of the framework agreement ." The formal signing of the restructuring agreement was reduced to nine the number of enterprises , there are three companies currently not signed a formal restructuring agreement with Baotou Steel Group .

In fact, from 2010 Inner Mongolia Autonomous Region government issued the "rare earth resources development order rectification work program " clearly within the scope of the autonomous region of rare earth exploration, mining , processing, smelting by the franchise since the Baotou Steel Group , Baotou Steel Rare Earth Group to integrate upstream enterprises in Inner Mongolia roads extremely difficult.

Inner Mongolia Autonomous Region Government in May 2011 issued a " rare earth upstream integration autonomous work out program ," requires the integration is completed at the end of June 2011 . Under this program, in addition to 4 regional level above furniture department in charge of the investment project approval document separation of rare earth smelting enterprises into the scope of the Baotou Rare Earth franchise , the rest of the more than 30 companies have all been compensated off and eliminated.

As it involves placement of workers , corporate compensation and other issues, the controversial program , for shutting down slowly. In early 2012, regional authorities eliminated on consolidation program was re- adjustment , the new program of cooperation in the restructuring of enterprises, the number of firms and compensation Close Close -out companies have changed.

There are the rare earth industry analysts pointed out , Inner Mongolia Rare Earth upstream corporate restructuring process is slow mainly because of difficulty, to the interests of all parties involved , a larger number of initial investment capital needs . Some environmental pressures faced by various enterprises , some busy out of production , restructuring more difficult .

For the integration of the North Rare Earth Group , Baotou Steel Rare Earth one official said , Baotou Steel Rare Earth Rare certainly formed the Northern Group's core business and will play a major role.

Inner Mongolia Academy of Social Sciences Institute of Economics researcher believes Baotou Rare Earth Group consolidated nine upstream deeper meaning that changes in the structure of exports of rare earth products , the formation of a greater competitive advantage and consistent export policy , expected to change the difficult years of the rare earth export disorderly competition in the state of governance.


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