Ganzhou Rare Earth Group was founded recently, and that means the core industrial group in major domestic rare earth producing region came online, and it's also an important step of domestic large rare earth leading company construction.

As high-tech industries develop rapidly in recent years, global demand for rare earth and consumption have been growing fast. China’s rare earth reserves accounts for 30% of the total volume in the world, and the country supplies 90% rare earth to the world. But the rare earth industry in China has been dispersed, disordered and polluting.

China’s rare earth industry needs to inspect exploration orders and raise industry consolidation ratio to develop healthily. China has taken effective measures recent years to the rare earth industry. On May 10th, 2010, China released the Proposals Regarding Promoting Sustainable and Healthy Development of Rare Earth Industry, pointing out China should form a rare earth industry led by large groups, and the consolidation rate of the top 3 enterprises in rare earth industry in south China should reach 80%.

The Suggestions Regarding Accelerating M & A at Major Industries was released on January 22nd, 2013, ordering China should push resources consolidation, and reduce the number of rare earth miners, smelters and separators, raise industrial consolidation rate and form the rare earth industry led by large enterprises.

Baotou and Ganzhou are major rare earth producing regions in north and south China, with rare earth output value accounting for 2/3 of total domestic rare earth output value.

Ganzhou is a major rare earth producing region in south China, and has developed rare earth mining and processing for over four decades. Of the 6 existing rare earth mining permits, 44 are in Ganzhou.

The Ganzhou Rare Earth Group is a large enterprise engaging in mining, smelting, separating, deep-processing and utilization, trade and researching, and the only group owning rare earth mining permit in Ganzhou.

Domestic rare earth market is under merger and acquisition, covering Minmetals, and Inner Mongolia Baotou Steel Rare-Earth Hi-Tech, Ganzhou Rare Earth and Xiamen Tungsten.

Inner Mongolia Baotou Steel Rare-Earth Hi-Tech is now constructing China Northern Rare Earth Group jointly with Gansu Rare Earth Group, acquiring backbone enterprises in Sichuan and Shandong province. Ganzhou Rare Earth and Inner Mongolia Baotou Steel Rare-Earth Hi-Tech are the two most important rare earth enterprises in south and north China, which will help realize the target of constructing national rare earth industry.


Rare Earth Manufacturer & Supplier: Chinatungsten Online - http://www.chinatungsten.com
Tel.: 86 592 5129696; Fax: 86 592 5129797
Email: sales@chinatungsten.com
Tungsten News & Tungsten Prices, 3G Version: http://3g.chinatungsten.com
Tungsten News & Tungsten Prices, WML Version: http://m.chinatungsten.com

The joint study group of Yamaguchi University, Ehime University and University of Tokyo released a report on April 2nd saying they had discovered a new mineral that contains rare earth.

Japan is confirmed to have massive high concentration rare earth reserves in seas around Minami-Tori Shima. Japan believes these resources will not run out in 230 years, and the grade of rare earth is about 20 times higher than China's.

Japan has been importing rare earth from China, while China supplies 90% rare earth to the world. But the situation may change. Japan's rare earth reserves is 10 times more than China's, which can be used for hundreds of years. According to Lin Boqiang, Director of Energy Economy Research Center of Xiamen University, the discovery in Japan is in line with China implementing rare earth export quotas.


Rare Earth Manufacturer & Supplier: Chinatungsten Online - http://www.chinatungsten.com
Tel.: 86 592 5129696; Fax: 86 592 5129797
Email: sales@chinatungsten.com
Tungsten News & Tungsten Prices, 3G Version: http://3g.chinatungsten.com
Tungsten News & Tungsten Prices, WML Version: http://m.chinatungsten.com

Capacity utilization rate at the rare earth industry fell short of 40%. According to China Nonferrous Metals Industry Association President Chen Quanxun, rare earth overcapacity is very severe, with capacity utilization rate below 40%.

Chen Quanxun said capacity of aluminum, industrial silicon and rare earth has been in oversupply. The capacity utilization rate of industrial silicon was less than 30%, with capacity utilization rate of aluminum reaching 80%.

 "Capacity surplus of industrial silicon and rare earth is very significant." Said Chen Quanxun, "The most effective measure to ease capacity surplus is to expand utilization fields."

But China is weak in rare earth utilization, such as rare earth permanent magnetic material, fluorescent material and catalyst. High-end rare earth permanent magnetic materials are mainly produced by Japan, while only several enterprises including Zhongke Sanhuan, Ningbo Yunsheng and Advanced Technology & Materials Co., Ltd (AT&M) produce high-end rare earth permanent magnetic materials in China.

Many domestic enterprises mainly engage in low-end ferrite magnets production, and fierce market competition and high rare earth costs forced them to reduce rare earth utilization or even suspend production. In this context, the capacity utilization rate of rare earth fell short of 40%.

Annual earnings of rare earth enterprises in 2012 slid across the board. Rare earth exploration and separation are most profitable of the industry chain. Rare earth prices dropped sharply in 2012, and upstream profits were also down. Inner Mongolia Baotou Steel Rare-earth (Group) Hi-tech Company ordered its upstream companies in north China to suspend production for three months. According to the company's annual report, net profits in 2012 were RMB 1.51 billion, down 56% from RMB 3.478 billion in 2011. The company reported with high inventories at hand, their cash flows were much lower than annual net profits.


Rare Earth Manufacturer & Supplier: Chinatungsten Online - http://www.chinatungsten.com
Tel.: 86 592 5129696; Fax: 86 592 5129797
Email: sales@chinatungsten.com
Tungsten News & Tungsten Prices, 3G Version: http://3g.chinatungsten.com
Tungsten News & Tungsten Prices, WML Version: http://m.chinatungsten.com

Rare earth prices have been falling since the start of 2013. Praseodymium-neodymium alloy prices rallied early this year, but transactions were muted, with prices stabilizing between RMB 400,000-405,000/mt, up RMB 15,000/mt from last year’s end. Prices for other rare earth categories maintained downward track.

In 1Q, prices for lanthanum oxide and cerium oxide dropped most steeply. SMM quotes for lanthanum oxide in late March were RMB 33,000-35,000/mt, while SMM quotes for cerium oxide were RMB 38,000-40,000/mt, down 34% and 22.4% respectively from the end of 2012.

In fact, rare earth prices have been weakening after the Chinese New Year holiday, with quotes for lanthanum oxide and cerium oxide leading decreases. Dysprosium oxide and dysprosium ferroalloy also fell. Transactions were muted, with most cargo holders standing on the sidelines.

According to Chen Quanxun, President of the China Nonferrous Metals Industry Association, the rare earth industry has been in severe oversupply, with the capacity utilization rate below 40%.

According to annual reports of listed companies, net profits at Inner Mongolia Baotou Steel Rare-earth (Group) Hi-tech Company last year were RMB 1.51 billion, down 56.57% YoY.


Rare Earth Manufacturer & Supplier: Chinatungsten Online - http://www.chinatungsten.com
Tel.: 86 592 5129696; Fax: 86 592 5129797
Email: sales@chinatungsten.com
Tungsten News & Tungsten Prices, 3G Version: http://3g.chinatungsten.com
Tungsten News & Tungsten Prices, WML Version: http://m.chinatungsten.com

 A major rare earth production corporation has been formed in east China's Jiangxi Province as part of efforts to boost the industry's sustainable development.

The state-owned Ganzhou Rare Earth Group Co., Ltd., based in the city of Ganzhou, was founded through the merging of its key subsidiary Ganzhou Rare Earth Mineral Industry Co., Ltd. and some local rare earth companies, including Longnan Wanbao Rare Earth Co.

Thirty-six percent of China's middle and heavy rare earth reserves are in Ganzhou, which has experienced overexploitation since the end of the 1970s.

"From now on, Ganzhou will step up efforts to facilitate the merging and restructuring of the rare earth industry," said Liu Jianping, vice mayor of Ganzhou.

As the only prospector in Ganzhou,the group will be involved in rare earth mining, smelting, processing and trade.

In 2012, the sales revenues of the rare earth industry in Ganzhou reached 34 billion yuan (about 5.44 billion U.S. dollars), acccounting for one-third of the industry's revenues nationwide, according to Ma Rongzhang, secretary-general of the China Rare Earth Industry Association.

As the world's largest rare earth supplier, China serves more than 90 percent of global demand for rare earth metals, a group of 17 elements that are necessary to manufacture high-tech products ranging from flatscreen TVs to lasers and hybrid cars.

However, the country holds only 23 percent of the world's rare earth reserves. Decades of excessive exploitation have greatly damaged the environment.

In January, the Ministry of Industry and Information Technology (MIIT), along with 11 other authorities, said in a guideline that the government is encouraging mergers in the auto, steel, cement, shipbuilding, electrolytic aluminum, rare earth, electronic information, pharmaceutical and agriculture sectors.

The government will slash the number of rare earth companies through mergers and concentrate production capacity, the guideline says.

China's top rare earth producer, the Inner Mongolia Baotou Steel Rare-Earth (Group) Hi-Tech Co., announced last December that it would gain control of another 12 rare earth companies in order to form a megacompany.


Rare Earth Manufacturer & Supplier: Chinatungsten Online - http://www.chinatungsten.com
Tel.: 86 592 5129696; Fax: 86 592 5129797
Email: sales@chinatungsten.com
Tungsten News & Tungsten Prices, 3G Version: http://3g.chinatungsten.com
Tungsten News & Tungsten Prices, WML Version: http://m.chinatungsten.com

China has been the world's largest rare earth exporter, but due to the limited backward processing technology, it is only an export raw material-based country for a long time. While the Beijing Nonferrous Metal Research Institute has announced an exciting news on 24 March 2013 that, The National Engineering Research Center of China's Rare Earth Materials has been officially formed in Beijing. With the birth of the national team, China's rare earth industry will transform from resource exports into high-tech products output.

According to Ao Hong, the Vice President of the Beijing Nonferrous Metal Research, The National Engineering Research Center of China's Rare Earth Materials is one of the first research centers backed by the State Planning Commission, with the utilization of World Bank Loan. Previously, the intellectual and capital spent on the study of Chinese domestic rare earth project are relatively dispersed, resulting in lower technical content of rare earth products, long-term raw material exports.


Rare Earth Manufacturer & Supplier: Chinatungsten Online - http://www.chinatungsten.com
Tel.: 86 592 5129696; Fax: 86 592 5129797
Email: sales@chinatungsten.com
Tungsten News & Tungsten Prices, 3G Version: http://3g.chinatungsten.com
Tungsten News & Tungsten Prices, WML Version: http://m.chinatungsten.com

As for rare earth producers, the bad days seem to have come already. According to 2012 performance report from listed companies, the rare earth industry is experiencing tough time.

According to performance report from Inner Mongolia Baotou Steel Rare-Earth Hi-Tech from January 1st, 2012 to December 31st, 2012, net profit attributable to share holders of listed company has fallen from 50% to 60%.

Actually, Inner Mongolia Baotou Steel Rare-Earth Hi-Tech is not the only company experiencing tough time in the industry. According to performance report from Guangdong Rising Nonferrous Metals Group from January 1st 2012 to December 31st, 2012, net profit attributable to share holders of listed company rell by 60-80%.

According to Wangjian, Senior Wealth Management of Changjiang Securities, said that Chinese rare earth exploiters’ dumping of rare earth by massive mining at the expensive of environmental damage is the major reason behind profit contraction at China’s rare earth industry. Besides, the soft demand in China is also a major reason behind profit contraction at Chinese rare earth producers.

Not only large companies reported profit decline, small companies also have very harsh time. According to Yuan Zhibin, researcher from CIC, administrative means adopted by government forced many companies to exit market, the remaining companies also feel the pinch. The overcapacity and excessive exploration not only resulted in steady decline in rare earth prices . After Chinese government restricted exports of rare earth, domestic rare earth producers lose overseas market, which resulted in high inventories and big losses for them.

According to Lin Liangmin, researcher of China Webmaster, overcapacity and soft downstream demand is the major reason behind sharp contraction of profit at rare earth sector.

The soft downstream demand only refers to domestic market, while overseas demand is still brisk. However, China’s excessive exploration of rare earth made government to interfere in this industry by restricting exports. Given that rare earth demand in China is limited, the whole industry fall into recession.

Besides, production of rare earth from the US, Vietnamese, and Mongolia also exert impact on China’s rare earth producers.

Based on current market movement, the industry is unlikely to reverse weak momentum in the short term, and will lucrative profits shall no longer return this year.


Rare Earth Manufacturer & Supplier: Chinatungsten Online - http://www.chinatungsten.com
Tel.: 86 592 5129696; Fax: 86 592 5129797
Email: sales@chinatungsten.com
Tungsten News & Tungsten Prices, 3G Version: http://3g.chinatungsten.com
Tungsten News & Tungsten Prices, WML Version: http://m.chinatungsten.com

Ganzhou Rare Earth Group entered operation on March 30, 2013, marking an important step forward in Ganzhou’s intensive development of rare earth industry.

Ganzhou claims title as China’s biggest medium and heavy rare earth production and processing region.

Ganzhou has been making great efforts in integration of rare earth industry in its jurisdiction since December 2010. All rare earth mines in the city were closed for readjustment in May 2011 and construction of standard mines is now underway.   .

Ma Rongzhang, Secretary General of the Association of Chin Rare Earth Industry, said Ganzhou Rare Earth Group will step up M&As and improve industry concentration so as to develop itself into a large south China rare earth group.  

Ganzhou Rare Earth Group is a large state-owned enterprise in Ganzhou as well as a leading south China rare earth enterprise. As the sole owner of mining rights to rare earth in Ganzhou, the company integrates the entire rare earth industry chain, from mining through smelting, separating, processing, trade, and R&D.

                   

Integration of light rare earth industry in north China has made great strides. At the end of last year, Inner Mongolia Baotou Steel Rare-Earth (Group) Hi-tech (hereinafter referred to as Baotou Steel Rare-Earth) signed the Framework Agreement on Integration and Reorganization of Rare Earth Upstream Producers with shareholders of twelve rare earth upstream producers in Inner Mongolia. Each of these twelve enterprises has agreed to transfer 51% stakes to Baotou Steel Rare-Earth for free.

Integration of rare earth industry in south China proceeds more slowly compared with north China. That being said, some central state-owned rare earth enterprises and those in key provinces and regions have stepped up M&As. For example, regional groups have been established in Jiangxi and Fujian, improving industry concentration in these provinces. Zhu Hongren, press spokesman of the Ministry of Industry & Information Technology said corresponding departments will give the green light to the establishment of large rare earth groups as appropriate.

Mr. Ma has urged Chinese rare earth enterprises to closely track rare earth development overseas and lay out corresponding schemes. Many foreign companies such as Molycorp and Lynas Corp have been building or expanding rare earth dressing and smelting projects in recent years. He also proposed to relax control on light rare earth exports while protecting medium and heavy rare earth.


Rare Earth Manufacturer & Supplier: Chinatungsten Online - http://www.chinatungsten.com
Tel.: 86 592 5129696; Fax: 86 592 5129797
Email: sales@chinatungsten.com
Tungsten News & Tungsten Prices, 3G Version: http://3g.chinatungsten.com
Tungsten News & Tungsten Prices, WML Version: http://m.chinatungsten.com

Peak Resources will soon release a revised JORC Resource for its Ngualla Rare Earth Project in Tanzania and has been granted a trading halt.

Ngualla currently boasts the fifth largest rare earth resource, and the highest grade of the seven largest deposits outside of China.

At present, the project hosts a resource of 170 million tonnes at 2.24% REO. The total resource includes a higher grade, near surface zone of 40 million tonnes at 4.07% REO for 1.6 million tonnes of contained REO.

The halt will last until the earlier of an announcement being made to the market, or the opening of trade on Thursday 4th April 2013.


Rare Earth Manufacturer & Supplier: Chinatungsten Online - http://www.chinatungsten.com
Tel.: 86 592 5129696; Fax: 86 592 5129797
Email: sales@chinatungsten.com
Tungsten News & Tungsten Prices, 3G Version: http://3g.chinatungsten.com
Tungsten News & Tungsten Prices, WML Version: http://m.chinatungsten.com

Baotou Steel Rare-Earth (Group) Hi-Tech, the country's largest rare earth producer, announced in its financial results that it saw a sharp drop in its net profit and revenue in 2012 due to withering demand and a slowing economy.

The company's net profit declined 56 percent to 1.51 billion yuan ($240 million) last year compared with 2011.

Its revenue fell 19 percent to 9.24 billion yuan as a result of continuous low demand in the rare earth market and a drop in rare earth prices .

From raw material to functional products, the revenue has been down significantly, the company said.

The current price for primary rare earth products is 35 percent lower than in 2012. The company plans to reach revenue of 7.5 billion yuan in 2013.

Baotou Steel resumed production on Feb 23 after a four-month halt in production affected by the price slump.

Another major rare earth producer, China Minmetals Rare Earth Co Ltd, announced on March 26 its revenue was down 47 percent from 7.6 billion yuan in 2011 and its net profit has dropped 74 percent from 1.02 billion yuan in 2011.

Rare earths, which comprise 17 metallic elements, are used in many important technological products including missile systems and hybrid cars.

Export trade value has been on the decline as well. According to statistics from Baotou Customs, despite exports of rare earth increasing 3.3 percent to 3,021 metric tons in 2012, rare earth prices are down 76 percent to $26,000 per ton.


Rare Earth Manufacturer & Supplier: Chinatungsten Online - http://www.chinatungsten.com
Tel.: 86 592 5129696; Fax: 86 592 5129797
Email: sales@chinatungsten.com
Tungsten News & Tungsten Prices, 3G Version: http://3g.chinatungsten.com
Tungsten News & Tungsten Prices, WML Version: http://m.chinatungsten.com