Ganzhou rare earth industry development and regulation policy seminar was held in Jiangxi University of Science and Technology (JUST ) on May 27. Ganzhou Deputy Mayor Chang Guowu and Vice President of JUST Luo Sihai attended the meeting and addressed. The meeting was hosted by Deputy Secretary General and Director-General of the General Office Xue Youchang and Chen Shixian, Secretary of Party Committee of the Commission of Industry and Information Technology of Ganzhou City.

Ganzhou Minerals Resource Management Bureau, Longnan County government, Xinfeng County government, Ganzhou Development and Reform Commission, Ganzhou Local Taxation Bureau, Environmental Protection Office, relevant magener of Ganzhou Forestry Administration, Ganzhou Rare Earth Group, JLMAG RARE-EARTH CO., LTD (JLMAG), JiangXi Illuma Fluorescent Materials, Ganzhou Qiandong Rare Earth Group, Ganzhou Chenguang Rare Earth New Materials, Jiangxi South Rare Earth Hi-tech Company, China University of Geosciences, Yanshan University and related leadership and experts attended the meeting.

Luo Sihai presented JUST's achievements in the cultivation of talents, and getting approval of national rare earth engineering and technological research center, and also illustrated the backdrop and target of the seminar. He reported the university is domestic first high school with rare earth engineering course of bachelor degree, which owns high standard rare earth research platform, and massive experience in rare earth study. The meeting will discuss the China Rare Earth Strategic Development and Export Industry Policy Research to give policy support to the healthy and sustainable development.

Chang Guowu affirmed the university's power. He suggested the research needs to assess national existing policies, adjusting the program timely according to current situations and the change of domestic and overseas demand. The research program should be focused in Ganzhou, and the policies should be operational. The policy should also be in line with international regulations.

Experts discussed and gave precious suggestions in the effects of national regulations on Ganzhou rare earth industry, problems in Ganzhou rare earth consolidation, how to reform tax to boost Ganzhou rare earth industry development and how Ganzhou government should cope with changes in international rare earth market.

The China Rare Earth Strategic Development and Export Industry Policy Research program is mainly operated by Professor Ye Rensun of JUST.


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Enhanced government regulations, M & A, the launch of rare earth quotas, environmental protection policies and market speculations had pushed up rare earth prices , with the rare earth industry becoming the focus of markets. Rare earth enterprises thus earned massive money.

But the rare earth industry has been weakening over the past year, with demand remaining sluggish. "Rare earth prices have dropped back to 2010 levels for now." Said a market player.

Although rare earth exports improved in Q1, but the market player reported even if they export 1,000 mt of rare earth each month, exports will only total 10,000 mt, which is much lower than the 30,000 mt/yr export quotas.

The rare earth industry is resource-intensive, with price trends affected by not only supply and demand but also commodity and macroeconomic situations. Both trading volumes and prices will maintain downward track in the near future.

But rare earth prices will rebound once bottomed out. However, rare earth oversupply will not relieve in the foreseeable future. China's rare earth capacity has reached 320,000 mt/yr for now, much higher than global total demand of 120,000 mt/yr.

Nevertheless, rare earth enterprises are seeking for a new way out, innovating technology and developing high-end rare earth new materials.


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Shanghai Rare Earth Industry Association was founded on May 28. Shanghai rare earth industry has been growing rapidly, with the industry output value increasing from RMB 2.52 billion at the end of the 10th Five-Year Plan period, to RMB 5.05 billion at the end of the 11th Five-Year Plan period.

Shanghai rare earth industry is improving its industry structure, developing into rare earth permanent magnetic material, luminescent materials, laser materials, hydrogen storage material, catalytic material, polishing material and biomedical material. High-technology and high value-added rare earth products are leading products.

Global rare earth demand by 2015 is expected to reach 210,000 mt, with domestic demand of 138,000 mt. Rare earth industry value in Shanghai will reach RMB 10 billion, up 98%.


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"Domestic rare earth overcapacity has been deteriorating, and rare earth enterprises come under severe losses, the operating rate falls short of 40%. We should push structure adjustment, method reform and upgrading, developing high value-added and profitable new materials." Said Hu Yaobin, General Manager of Inner Mongolia Huayi Rare Earth Company in an interview.

Hu said there are over 120 rare earth producers in China for now, with annual oxide capacity a high 320,000 mt/yr, when combined with overseas equipment brought online, market supply far exceeded the 120,000 mt/yr total global demand. Overcapacity and international economic downturn has caused demand to fall sharply, causing domestic rare earth business to deteriorate since 2012. Rare earth oversupply will not ameliorate in the near term.

Hu said the soaring rare earth prices over the past years and China implementing rare earth export quotas to protect environment and strategic rare earth resources triggered market concerns over rare earth supply shortfalls, and allowed overseas countries to accelerate rare earth exploration. Over 200 companies in 40 countries planned over 500 rare earth projects, with the 40 projects in 15 countries including US, Australia, Brazil, Canada and Kyrghyzstan progressing most rapidly. Molycorp's capacity has reached 5,000-6,000 mt/yr, and will increase to 400,000 mt/yr by the end of 2013. Australian Lynas Corp produced its first batch of rare earth products last year, and its capacity will reach 22,000 mt/yr in several years, which can meet about 1/3 of global demand. Merely the two companies will meet global demand outside China after 2015.

Hu reported high rare earth prices forced consumers to seek for substitute or substitute technologies, largely contracting demand for rare earth, and leading to oversupply of the industry. Foreign countries have developed rare earth permanent magnet substitute technologies, rare earth reduction technology and rare earth polishing powder re-utilization tactic. Toyota, for instance, developed rare earth-free motor. Besides, the development and utilization of LED illumination technology constrained demand for rare earth luminescent material.

 "Rare earth oversupply is negative for the industry, but it also forces doemstic rare earth enterpirses to seek for a way out by technology innovation and producing high-end rare earth new material." Said Hu.
　　
Domestic rare earth resources have been explored for over five decades, but are unadvanced compared to international levels, mainly concentrated in permanent magnet material, luminescent materials, hydrogen storage material and polishing powder. Domestic high-end products rely on imports.

Domestic rare earth product exports are majorly preliminary products with low or medium value-added, which accounts for 75% of total exports. In contrast high value-added exports only account for 25% of total national volume, with margins of enterprises only 1%-5%. High-end rare earth rare earth permanent magnetic materials are mainly produced in Japan.

Hu Yaobin believes rare earth enterprises will not survive overcapacity unless they develop high-end products.


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