Government-led scheme may not be able to increase rare-earth voice

"Saying that for years, but no big changes. "

"Are all legally established enterprises, integration of people and what have you? "

Discusses two years to form a large group of rare earths in China finally settled without cause resonates with people in the industry.

On January 8, the Ministry of industry and information technology (referred to as Ministry) conferences held in Beijing the formation of large rare earth enterprise groups. Play, formed by Ministry led the development of the rare earth Group programme has recently been approved by the State Council, the programme will be finalised rare earth group "1+5" pattern, including the baotou steel rare earth founded the Northern Group, two big enterprises Minmetals and Chinalco and Xiamen tungsten Ganzhou rare earth, rising nonferrous metals, rare earth group formed three regional businesses.

Early in 2002, the country has attempting to prepare the establishment of two largest rare-earth group. But because "the Middle East had oil, China had rare earths", China has rare earth resources in the world's most populous nation, for well-known reasons, plus rare earth mining is not very difficult, personal dig mining in the first 10 years of the new century, not only did not receive effective treatment is growing. Consequence is that only about 23% per cent of world reserves of rare earth resources in China, in a "cabbage" supply more than 90% of the world's rare earth market. Also increase rare earth pricing power to become China's most pressing problems.

"Rare earths are not only China, simply because production in China, the price is cheap, people shut down. "The Chinese society of rare earths Secretary-General Xu Guangyao said to the frustration of the global entrepreneur. Around 2005, countries from the abolition of export tax rebates starting list reduced exports of rare earths, and keep the compressed export quotas in an attempt to change the status quo of China sales. But it was Japan and the United States, the European Union strongly resisted. They join forces to the WTO dispute settlement body to prosecute accused China on rare earths "undue restrictions on rare earth exports" issue, violated China's commitments when it joined the WTO.

China's rare earths quotas has caused increases in international prices of rare earths in 2011, but also induced by United States, and Australia again mining the country's rare earth resources. In March 2012, the WTO ruled against 9 from China that the restrictions on the export of raw materials for "violations". International panic subsides, prices peak in 2013 and 2011 fallen 60%.

Face the unfavourable situation of international litigation, as well as internally re problems of overcapacity, management flexibility to consider a more flexible and reasonable policy instead of one size fits all, and encircle the Terminal control, cut from its source to contrary to mining rare earth resources, overfulfilling the power to speed up integration on rare earth becomes urgent. In May 2011, the State Council issued the opinions on promoting the sustained and healthy development of rare earths, propose insisting on total control and optimization of memory, speed up the strategic groups of large enterprises, actively promote technological innovation, the establishment of strategic reserves of rare earth system. The end of 2012, China's largest rare-earth producer at baotou steel rare earth with 12 upstream Enterprise integration restructuring agreement is valid for one year from light rare earths most abundant in China's Inner Mongolia baotou steel rare-earth integration area, formed the Northern path of the rare earth group became clear.

On January 3 this year, baotou steel rare-earth reported, on December 31, 2013, the company's controlling shareholder, baotou steel (Group) company in baotou city, Inner Mongolia Autonomous Region 9 re upstream businesses and shareholders respectively, signed the agreement on the integrated reorganization.

"Currently on the 9 companies for financial management and environmental compliance guidelines and norms. Its subsidiaries of listed companies reached standards, as absolute majority-owned subsidiaries of the baotou steel rare-earth, future eligible companies will inject the baotou steel rare-earth stake. "Baotou steel rare earth Secretary Zhang Rihui said in an interview.

But this has aroused the resentment of other enterprises. "Their shares at no cost to holding our 51%, we're certainly not happy. Plus we are mainly made of metal, raw materials are rare-earth oxides, is not to say that they (the baotou steel rare-earth) can't live. But 9 because their ingredients are coming from baotou steel rare-earth, so it had to be integrated. "Not one of the three companies involved in the consolidation, XI Chun in baotou rare earth limited liability company Zhang guodong, sales manager of the global entrepreneur complains.

More important is that consolidation is itself a complex project. Xu Guangyao said: "the future integration of the baotou steel rare-earth hard nor too small. Because integration is an economic relationship, political relationship is not a simple one. "Like Mongolia, baotou steel rare-earth occupies a larger advantage, integration difficulties are still not small, and more heavy rare earth resources in Jiangxi, Guangxi, Sichuan and other provinces, involving enterprises more and more dispersed, integration is even more difficult. Local government and has been in the layout of rare earths in South Central enterprises, and some local State-owned enterprises and privately-owned rare earth companies, in recent years, almost all sites at staking. Rare earth companies such as Chinalco's rare earth resources, Jiangsu, Guangxi and other places, and has been on the rare-earth integration planning for years, and China Minmetals rare earth (20.20,-0.04,-0.2%) mainly in Jiangxi and Hunan layout, is the one of the largest heavy rare earth separation and processing enterprises in the South, rising nonferrous metals, while Xiamen tungsten industry in Guangdong, Fujian has advantages.

Jiangxi rare earth industry association Rao Yong, Director of the global entrepreneur, especially have medium and heavy rare earths most abundant in Ganzhou, Jiangxi province, due to years of rare earths mining and processing enterprises are mostly small and medium, does not want to completely control to others. Was lucky, by the Government of Ganzhou city, promote the formation of the Ganzhou rare earth mining limited, the miit also identified one of the 6 major rare earth enterprise groups.

According to reports, 6 large rare earth group, will assume in the future integration of rare earth enterprises and the task of optimizing resources in the region, including consolidating scattered smelting separation of enterprises in the region, integrating at the same time comply with policy requirements, capacity reduction and environmental governance. "Competing for not that limits on the pricing of rare earth production and exports. Is important to improve their high added value processing capacity. "Xu Guangyao said. In his view, the countries aimed at limiting the environmental protection and consolidation is understandable, but it must not mean drop in Chinese production and exports will be able to gain more bargaining power, but should step up efforts to foster for rare earth processing enterprises.

That was the case. United States Pentagon said in a report last month, even as global's reliance on Chinese rare earths is still high but is declining. Greenland and Russia are opening and expanding the export of rare earth last year. It is understood that at present China's share of global rare earth production have decreased to 80% from 95% in 2010. "China's policy on rare earths will not cause too much impact on the international market, we can relax the sensitive nerves. "Sternberg recently wrote WSJ columnist says China could learn from foreign experiences, to the market to solve, rather than leading resource allocation by the Executive power.


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