Deadline has passed dashed rare earth industry consolidation

From the State Department for the rare earth industry to develop the integration deadline has passed for two months, the North and South Rare Earth Group integration but was not successful, Beijing Chinese Commercial News reporters Zai Jinqi and Fu Baotou and other places interviews found that the current Northern Rare Earth Group Despite the explicit integration methods, namely, In Baotou Steel Rare Earth as a leader, but 12 to be combined business is still in its preliminary assessment of them, did not achieve true integration, not only that, due to the recent rare earth prices skyrocketing, corporate valuation changes, how the future still is uncertain; Southern Rare Earth integration more unfavorable, on the one hand the seven group compete with each other, who will tap delay is difficult to determine, the rare earth industry consolidation targets fall foregone conclusion.

Leading although fixed but hidden risks

By the State Council in 2011 proposed to promote the rare earth industry healthy development of the opinion that this year for the management of the first phase of the "great period", namely, the basic formation of large-scale enterprises as the leading rare earth industry pattern, the South top three conglomerates industrial concentration reaches 80 % or more.

Although the Fifth China Baotou Rare Earth Industry Forum, the Ministry of raw materials Industry Secretary Chen Yanhai repeatedly stressed that after the early series of program development and practical action, integration has been an initial progress, but Beijing Chinese Commercial News reporters Zai Luntan and Xian Chang interviews have found that the integration is not as MIIT expected smoothly.

Among LREE dominated northern integration territory seems to have been more clear in the region leading enterprises Baotou Steel Rare Earth became integrated central force, has been with Inner Mongolia 12 upstream rare earth companies and shareholders signed the "rare earth upstream business integration and restructuring of the Framework Agreement "These companies agreed to free the Baotou Rare Earth transfer of the enterprise 51% stake. "12 companies have not substantially integrated into the company, and now still doing preliminary work in assessment, consideration stage." Rare-Earth General Manager Zhang said, the 12 companies, some do upstream, some do separation , as well as do new materials, different varieties. Although the integrated enterprise will guide its downstream industrial transfer, while the upstream mainly to control the production, improve efficiency based, however, are now faced with a new problem: rare earth prices skyrocketing triggered business valuation changes.

Separatist warlords difficult to set faucet

In contrast to the heavy rare earth-based Southern industry consolidation affected by the above factors heavier.

On the one hand, although so far the region has been formed to China Minmetals, Chinalco Group, the color of shares, Ganzhou Rare Earth Group, Guangdong Rare Earth Industry Group, Fujian Rare Earth Group and Hunan Rare Earth Group dominated the seven forces, however, it is also between them, the game became a Southern Rare Earth integration problems.

Informed sources, the Ministry's goal is to present Southern Rare Earth forty-five main competition integrated into twelve. "But it is very difficult and it does not Northern Rare main competition single, Southern Rare Earth integration process involves not only the central level, also involving local state-owned game between, also involving central and local governments of the game." The insider says.

On the other hand, the South system market is small, scattered, chaotic situation is more serious, a single leading enterprises dominate the entire market is more difficult to achieve.

Enterprises and local attitudes decided to consolidate progress

Investment Advisor in the metallurgical industry researcher Weiqi Ning believes that industry consolidation does not happen overnight, especially in resource companies between the merger and reorganization of the difficulties faced by more, "on the one hand, between enterprises involved in direct economic benefits, market share, controlling, profitability capacity and other factors had important consideration; the other hand, at the national level to promote the industry consolidation, and local governments and some companies exists between economic interests, local government's attitude also affects the integration process of the speed. " Weiqi Ning said.

Regulators seem to realize integration difficulty. Earlier this year, 12 ministries and efforts to promote the merger and reorganization of the nine industries to include rare earths. Recently, in the rare earth industry forum eve of the opening, the Ministry and other eight ministries announced plans this month on the 15th began to organize to carry out a three-month fight against rare earth industry illegal special action, the industry believes that the harsh campaign, to a certain degree of consolidation in the industry paved the way, it is still difficult to achieve in a short time to solve the North rare problems. Moreover, the industry also has voice questioned: large group of established or may trade monopoly.


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