Rare earth black interests chain stirring market collusion is the focus of this year the black

According to reports, media reports said, the Ministry of industry and information technology combined with multi ministries will open a new round of rare earth crackdown in August 15th. The price of gold has sold for “ ” rare earth, now only “ the price of cabbage ”, behind this, black interests chain of rare earths from production to circulation is the main reason for lower prices. Ministry of industry and the relevant responsible person said that the collusion is the focus of this year's black.

The rare earth market in China “ black ore ” in the end how much, no specific statistics, some people say that more than 30%, also some people said that accounted for half of the. China's Rare Earth Industry Association Deputy Secretary General Chen Zhanheng analysis, in 2014 China's rare earth production mandatory plan is 105000 tons, domestic demand more than 150000 tons, it is in short supply, the actual situation now is begged for be more than, more supply out from illegal channels.

The huge profit space become the fundamental causes of the illegal coal. Jiangxi Ganzhou Golden Eagle rare earth metal minister Li Dingwen said: mining ore cost up to as long as more than 4 dollars, but it is the real value of 十几万一 tons.

Mining rare earth ore to pay 17% of the value-added tax; local standards, resources tax to 2-3 million; and mineral supplement fees, and illegal mining completely escape the tax. From the perspective of 7 at the end of the price, the price of ion type rare earth minerals in the regular 19-21 yuan / ton, while the southern private ore price only 9-13 yuan / ton.

The rare earth market downturn, the formal business was black ore squeezed more sad days. A large Ganzhou rare earth company manager Xiao said, many black ore are closely related and local interests, regulation is difficult. The township, there are shared (black rock) phenomenon, once someone check was just sitting there, not mine, this wave after the wind had to continue mining.

Light cut no one bought too, the circulation link, black ore have a set of “ wash white ” method. They will be rare earth separation into lanthanum oxide cerium, praseodymium neodymium oxide enrichment enrichment and billing, bypassing the rare earth invoice.

Xiao Manager: sell ore may court disaster, so they avoid Kaiyuan mine invoice to open some enrichment in the enrichment of this country, not clearly defined, so they also drill this loophole.

“ wash white ” after the black earth even more formal rare earth enterprise secretly purchase. If in strict accordance with the national mandatory plan production, rare earth from upstream to downstream enterprises are facing “ cannot eat to the full ” the problem of idle capacity became illegal exploitation of rare earth mine to digest the best channel.

Even in the absence of “ wash white ” rare earth also sell. Li Dingwen revealed that the magnetic material factory and other downstream enterprises in order to save costs, would rather purchase does not tax the rare earth.

Li Dingwen: take magnetic material factory, now all the tax is relatively high, if the tax is to do, they can't survive, is at a loss.

How to strike the illegal exploitation of rare earth from the source, the Ministry of national rare earth office director Jia Yinsong said that the key is to implement the territorial supervision responsibility, not the implementation of specific place, the responsibility of government regulation collusion, illegal approval of projects and conduct accountability.

Jia Yinsong: behind the black interests chain is collusion, southern ore mining in the deep forests, from injection to recovery and fast two months, not to cooperate with local government officials, did not.

Some of the media reports, the Ministry of industry and information technology combined with multi ministries will open a new round of rare earth crackdown in August 15th. However, China's Rare Earth Industry Association Deputy Secretary General Chen Zhanheng said, black must combined dredge. Rare earth mandatory production plan is for the protection of rare earth resources, now has become the formal business of the magic spell.

Chen Zhanheng: the plan of total quantity control can not meet the market demand, you have to adjust the plan to meet the market demand, this mine is not, some of the illegal exploitation of natural to come up, he wants to fill the gaps in the market.


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China Focus: China must tackle rare earth industry chaos

Rampant illegal mining, black market dealing and smuggling has seriously disrupted the rare earths market and led to a nosedive in prices of the resources in China, a senior insider has said.
 
Speaking at the Sixth Baotou China Rare Earth Industry Forum, Jia Yinsong, an official of the Ministry of Industry and Information Technology (MIIT), said the illegal mining, production and selling of rare earth materials have already taken the shape of a "black interest chain."
 
Rare earths, a class of 17 mineral elements, are some of the most sought-after metals due to their vital role in green technologies like wind turbines and car batteries as well as in military sectors.
 
With its rare earth reserves accounting for 23 percent of the global total, China supplies over 90 percent of the world's market demand at the cost of causing much pollution.
 
Despite high worldwide demand for the resource, the prices of rare earth elements cerium, lanthanum and ytterbium, which constitute 70 percent of light rare earth output, plunged by 40 percent in the second half of last year, as compared with those in the first half year.
 
In 2013, China's rare earth export volume rose by 38.3 percent year on year. However, the export value fell by 36.7 percent in the same period.
 
Industry officials and producers convened at the two-day Baotou China Rare Earth Industry Forum, which opened in Baotou City of north China's Inner Mongolia Autonomous on Friday, observed that the trend of price declined has continued into this year. The average price of rare earths has fallen back to the levels of 2010.
 
China on Thursday expressed its regret the WTO's final ruling earlier in the day that China's export duties, quotas, and administration of rare earths, tungsten and molybdenum products were inconsistent with WTO rules and China's Accession Protocol.
 
The European Union, Japan and the United States together brought the case to the WTO claiming that China's restriction on rare earth exports had limited other countries' access to the minerals.
 
Gan Yong, deputy director of the Chinese Academy of Engineering and head of the China Rare Earth Association, said at the forum that without the management mechanism, it would be more difficult for the Chinese government to regulate the industry.
 
Small-scale mining and cut-throat price competition over the years has led the domestic rare earth sector into trouble.
 
Jia, who is in charge of the MIIT's Rare Earth Office, noted that high profits from illegal mining have led to collusion between local government officials and illegal miners.
 
In Ganzhou City, east China's Jiangxi Province, which is rich in light rare earths resources, more than 40 officials were probed for their involvement in illegal rare earth mining and processing last year.
 
In a three-month campaign jointly held from August last year by the Ministry of Public Security, the General Administration of Customs, and the ministries of land resources and environmental protection, 126 rare-earth production firms were ordered to suspend production and another 161 firms had their production licenses revoked.
 
Inspectors also seized 19,000 tonnes of illegally mined rare earth materials during the campaign.
 
In addition to cracking down on the "black interest chain," industry regulators also approved six rare earth blocs earlier this month amid a governmental push to consolidate the industry.
 
Six rare-earth companies including Baogang Group, China Minmetals, Chinaclo, Guangdong Rare Earth Corp, Ganzhou Rare Earth Group, and Xiamen Tungsten are encouraged to take the lead in integrating regional resources to improve industrial concentration.
 
 
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China's first rare earth products exchange opens

China's first rare earth products exchange opened  in Inner Mongolia Autonomous Region after a three-month trial.
 
The Baotou Rare Earth Products Exchange is expected to regulate the country's rare earth market, improve the way prices are formed and promote development of the industry, said Jia Yinsong, a Ministry of Industry and Information Technology official.
 
The exchange will introduce three spot transaction modes, namely price bidding, listed trading and real-time trading online, with more than 10 trading items including cerium oxide, praseodymium-neodymium oxide, and europium oxide.
 
Located in Baotou City, the exchange was initiated by Baotou Steel Rare Earth (Group) Hi-Tech Co., China's leading rare earth producer, and another 11 firms and institutions with a registered capital of 120 million yuan (19.32 million U. S. dollars).
 
China is the world's largest rare earth producer and exporter, accounting for more than 90 percent of the world's supply. However, the country lacks pricing power in the global market and wild price swings of resources have had a negative effect on Chinese producers.
 
The exchange will help integrate resources during their circulation in China and gradually regulate the trading and pricing of them, said Zhang Zhong, general manager of Baotou Steel Rare Earth Hi-Tech Co..
 
Zhang said the exchange will improve transparency of the market and help China to secure a bigger say in the pricing of rare earth products to stabilize the market.
 
Rare earth metals are vital for manufacturing high-tech products ranging from smartphones and wind turbines to electric car batteries and missiles.
 
 
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Chalco approved to establish rare earth group

The Aluminum Corporation of China Ltd. (Chalco) confirmed on 6th,Aug. that it has won approval to form a rare earth bloc amid the government push to consolidate the industry.
 
Chalco said the Ministry of Industry and Information Technology (MIIT) has approved its plan to integrate rare earth enterprises in the provinces of Guangxi, Jiangsu, Shandong and Sichuan to its wholly owned subsidiary, China Rare Rare-earth Corp.
 
The news follows the MIIT pledging earlier this year to encourage and support six industry leaders, including Chalco, the Inner Mongolia Baotou Iron & Steel (Group) Co., Ltd. and China Minmetals Corporation to coordinate more mergers and acquisitions to consolidate the industry.
 
Boosted by the news, Chalco's shares surged by the daily limit of 10 percent to end Wednesday at 4.07 yuan (0.66 U.S. dollars) per share.
 
China is the world's largest rare earth producer and exporter, but the industry is beset by problems including illegal mining, smuggling and a lack of competitiveness due to weak research and development.
 
 
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China's rare earth policy accords with WTO rules, experts

Chinese experts have regreted a WTO ruling against China's rare earth export policies, while calling for consolidation in the highly polluting sector.
 
The World Trade Organization (WTO) ruled on Wednesday that China's export duty, export quotas, and export quota administration and allocation measures imposed on rare earths, tungsten and molybdenum products were inconsistent with WTO rules and China's Accession Protocol.
 
Under WTO rules, China can make an appeal within 60 days and the final ruling will come in three to four months.
 
Mei Xinyu, a foreign trade expert at the Ministry of Commerce, said China's restriction on rare earth exports is designed to conserve resources and protect the environment, and it is in line with WTO rules and China's own situation.
 
China is the world's largest rare earths supplier, serving around 90 percent of the world's demand for rare earths, a group of 17 elements that are widely used in high-tech products ranging from flat-screen TVs to lasers and hybrid cars.
 
However, the country holds only 23 percent of the world's rare earth reserves. For decades, excessive exploitation, antiquated mining technologies and lax environmental standards have taxed the country's environment.
 
In some towns in east China's Jiangxi province, where reserves of precious ion-absorbed-type rare earths abound, exploitation since the late 1980s has not only destroyed local landscapes, but also poisoned streams and crops.
 
Li Yang, with the China Institute for WTO Studies at the University of International Business and Economics, urged WTO personnel to take field trips to China and learn about the real situation.
 
Then they will understand that the Chinese government is limiting rare earth production and consumption for the environment's sake, said Li.
 
As a matter of fact, most nations with rare earth deposits, including the United States, closed their own mines decades ago as rare-earth mining and processing is notoriously devastating to the environment.
 
Besides export quotas, China has implemented policies including output caps, stricter emissions standards and high resource taxes to curb environmental degradation and protect the resources.
 
Now, as the country may have to scrap its export measures, the experts believe the country should put more weight on alternative measures to better manage rare earth production.
 
Feng Jun, an analyst from the Shanghai WTO Affairs Consultation Center, said China should raise resource taxes to increase the cost of mining. What's more, higher emissions standards will force substandard companies to close.
 
Mei Xinyu added that China should speed up the consolidation push in the sector to upgrade the industry and crack down on illegal mining.
 
 
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