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

According to the annual report of Inner Mongolia Baotou Steel Rare-Earth (Group) Hi-tech (hereinafter referred to as Baotou Steel Rare-Earth), the company’s profits declined nearly 57% YoY to RMB 1.51 billion in 2012, due largely to shrinking demand from slowing economy. The company lowered its sales target for this year by as much as nearly 20% out of growing pessimism over outlook for rare earth.     

Baotou Steel Rare-Earth reported RMB 9.24 billion in operating revenues last year, down 19.83%, and RMB 1.51 billion in net profits, also down 56.58%. Earnings per share were a mere RMB 0.624, markedly down from RMB 1.436 in 2011.  

The company explained that rare earth market was depressing throughout 2012, accompanied by falling prices. Sales of rare earth metals slumped due to poor orders from magnetic material producers, resulting in a 47.18% decline in the company’s operating revenues in this segment.  

The rare earth market has shown no signs of turning around. Prices for rare earth products slid 35% YoY in early 2013. Plagued by sluggish rare earth markets, Baotou Steel Rare-Earth, a leading rare earth producer, has set itself a target of achieving RMB 7.5 billion in sales revenues in 2013, down 18.85% from last year’s RMB 9.24 billon.  

The company says it will step up integration and restructuring of rare earth industry in Inner Mongolia. Besides, it will vigorously push ahead with alliance of producers in Gansu, Sichuan and Shandong to pave way for its establishment of China North Rare Earth Group.


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's rare earth exports soared in February. According to China Customs, China exported 1,106 mt of rare earth in February, up 289.12% YoY. Market players believe that does not mean overseas demand improves.

After rare earth prices climbed to a high in August 2011, China's rare earth exports had been falling for several consecutive months. China's rare earth exports in 2012 were below 2011 levels, and nearly half of export quotas was vacant. Rare earth exports account for 1/3 of domestic rare earth output, and shrinking overseas demand will negatively affect the rare earth market. But rare earth exports tripled in February after rare earth prices rose to early 2011 levels. Is that because overseas demand improves?

But Gao Yuxin, a rare earth analyst from Ruidow, reported demand for rare earth was still sluggish, and transactions were muted.

                  

Shanghai Heli Rare Earth Material Company engages in rare earth import and export business. According to Manager Yuan, the export data does not mean real demand grows, and rare earth international trade is still sluggish. Most China's rare earth exports were made to Japan. According to a professor from Hirosaki University, Japan reduced rare earth imports two years ago due to high prices, and produced with raw material inventories. There were also large amounts of rare earth smuggled into Japan, with prices very low, which is excluded in regular statistics.

Domestic market was also sluggish. Some rare earth users now began to purchase rare earth but modestly with existing prices.

Demand for rare earth was sluggish due mainly to China's weak rare earth downstream user industries. Half of rare earth is used in new materials, while only Zhongke Sanhuan, Advanced Technology & Materials Company and Ningbo Yunsheng produce rare earth permanent magnetic product. Many China's rare earth permanent magnetic product producers posted losses in 2012. Once overseas market weakened, rare earth industry will be impacted.

Demand for rare earth is now extremely weak. One rare earth trader said they only hope rare earth prices do not fall further. Neodymium oxide prices have fallen from RMB 1.4 million/mt in August 2011, to RMB 400,000/mt in March.


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 Ministry of Land and Resources (MLR) held a press conference titled “Reserves of Petroleum, Natural Gas and Major Solid Mineral Resources in China during 2012” on March 27. According to the press conference, standards on mining recovery rate, mining dilution rate and dressing recovery rate in mineral resources of strategic importance including iron ore, copper ore, lead ore, zinc ore, rare earth and sylvite will be formulated this year.

According to Xu Dachun, Deputy Head of Mineral Resources Reserve Department of MLR, its department will establish databases on comprehensive utilization of mineral resources across China, complete surveys and assessment of mining recovery rate, mining dilution rate and dressing recovery rate of key mineral resources, and release reports on comprehensive utilization of mineral resources on a yearly basis. China’s first resource saving and comprehensive utilization evaluation indicator system will be released, which will be used as standards for evaluation of resource saving.  

China will vigorously popularize advanced and applicable technology so as to facilitate exploitation of mines.

Mr. Xu added that its department will strictly collect mineral resource compensation fees based on mining recovery rate so as to promote rational exploitation of mineral resources.


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 rare earth case against China launched by the WTO will be decided by the end of the year. Market players believe China will have little chance to win the case, and predict China's management system to the rare earth industry will change, with new rare earth regulations expected to be released.

According to market analyst Chen Jiazuo, China's rare earth industry should put emphasis on local utilization of rare earth and rare earth functional material. He said, rare earth market players generally lack confidence for China to win the WTO rare earth case, and that will cause China to change its management system. Existing management measures including quotas, taxes and qualifications will likely be eliminated, and new regulations will be released.
　　
China will likely accelerate construction of rare earth groups, so that China's rare earth business can run in a way of marketization.


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