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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Since August 7th day laborers Ministry's official website announced the next phase will be conducted nationwide Rare "hitting" the news, China's rare earth stocks share price once again usher rose to the north of rare earth enterprises Baotou Steel Rare Earth, for example, from August 8, after the opening, the company stock for several days rose, 8 August the company opened at 25.6 yuan / share, as of Aug. 12 closing, the company's share price was 29.57 yuan / share, only three trading days, shares rose 15.51 percent.

Although the share price rose, but so far, China's rare earth prices are still in an adjustment phase, while the rare earth prices are around by the upstream enterprises, these include the Baotou Rare Earth. But in recent years, Baotou Steel Rare earth prices have made to protect things, but now I must mention as its "awkward" thing.

Stop insured did not bear fruit

July 1, 2013 evening, Baotou Steel Rare Earth issued a "dilute selected plant shutdown announcement."

Announcement shows that the thin-election plant shutdown is to tie clad (Group) Corporation oxide ore mountains (ie, oxidized ore beneficiation overall migration to the Bayan Obo mine) project implementation, good company overall move to dilute the mill related Baiyun'ebo preparatory work, the company decided to start from 1 July, under the thin election plant shutdown half a year.

In addition, the Baotou Rare Earth's announcement that dilute processing plant was halted, the company smelting separation and functional materials can be used such as downstream industries in recent years, the company reserves the normal production of rare earth concentrates, will not affect the company's downstream industries, not affect the company's annual results goals.

While last year because the industry downturn, Baotou Steel Rare Earth three times Published discontinued insured announcements, other industry leaders Minmetals, Chinalco and Xiamen Tungsten (32.14,1.22,3.95%) followed subsequently discontinued. Discontinued insured in the whole industry a month later, some rare earth stock market appears broad and representative species of rare earth oxide, praseodymium neodymium prices rose 20 percent per ton reached 450,000. But after a brief rise, prices will fall. Eventually, in 2012 Rare annual average price fell by about 40%.

For the year, prices of rare earth movements, have declined to be named, analysts said, although rare earth prices bullish, but from the demand point of view, has not been a significant increase in the second half of market uncertainty, if the September, October do not wang so, Baotou Steel Rare Earth may have to "cut price" it.

Integrated enterprise will take time

In addition to the basic discontinued insured plans, "fall", but since the end of 2012, with 12 of Inner Mongolia Baotou Steel Rare-earth enterprise integration upstream substantive progress yet, is still in a kind of "delegated management" of the state.

May 4, 2011, Inner Mongolia introduced the "rare earth upstream enterprise integration phase work program", the local 35 companies will be mergers and acquisitions, compensation off, out of shutting down. By the end of 2012, Baotou Steel Rare Earth with one of the 12 companies signed restructuring framework agreement. In the end of 2013 have been rare forum, Baotou Steel Rare Earth, general manager Zhang said in an interview, said that 12 to be "incorporated" into the Group's business has not been substantive consolidation, is still in the early stages of integration, because " assessment do account ", etc.

"According to the Framework Agreement, the reorganization of the 12 companies and their shareholders must agree to the Baotou Rare Earth free transfer 51% stake in enterprises, consistent with the Baotou Rare Earth Development Plan and to achieve compliance with national environmental standards. Baotou Steel Rare Earth in human , technology, capital, rare earth resources, mandatory production plan targets and export quotas to give 12 corporate support. "Zhang in the rare earth forum said.

In addition, a number of insiders pointed out that the Baotou Rare Earth integration 12 companies real difficulty lies in the smelting and separation indicator is not enough. Be integrated with a home business, for example, concentrates before 1000 tons monthly subsistence, and now can only get five million tons Baotou Rare Earth Concentrate targets. Above estimates, 14 separate business capacity equivalent to a minimum of approximately 80,000 tons oxide calculation, but only 35,000 tons Baotou Steel Rare Earth Separation smelting targets.

Currently 12 companies are not included in the staffing and financial Baotou Steel Rare Earth unified management, namely in the "food" in the case financing. "Only smelting separation part, this is more of a delegated administration." The person said.

Exchange has not issued rules

In addition to the two "awkward" thing, but now, the concern is still rare exchanges to set up the past year, trading rules yet to be released.

In rare forum, Baotou Rare Earth Products Exchange Gu Ming, general manager, said in an interview with reporters, will dysprosium, terbium, europium and other rare earth as a variety of transactions, "the three is OK", but even when launched according to market conditions. These varieties have the characteristics of the larger price fluctuations, while lanthanum and cerium year price changes is small.

Data, from early June to late July dysprosium gains more fierce, from 1.1 million yuan / ton up to 2.5 million yuan / ton. Prior to this, the price of dysprosium oxide also rose fell.

Gu Ming said the goal is to exchange hedging direction towards the future may also be in the South and other places to set up storage base. For the future how to deal with the competitive aspects of Ganzhou, Gu Ming said the exchange is actually doing service work, "serving well, we will come to you like the deal."

According to information, participation in exchanges organized 12 shareholder business capacity accounting for the earth more than 80%. However, Ganzhou Rare Earth Group official website of the information, the company mastered more than 60% of the ionic rare earth quotas of production and supply of rare earth oxides, rare earth ranked first in the South. And Ganzhou Rare Earth Group is not a shareholder of Baotou Rare Earth Exchange. Moreover, in the last year, August 8 after the establishment of the Baotou Rare Earth Products Exchange, Jiangxi Province also established at the end of Ganzhou, Jiangxi Rare Metals Exchange.


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At present, the production capacity of rare earth permanent magnet materials 300,000 tons, annual output of 80,000 tons, less than 30% capacity utilization. This year, China's production of rare earth permanent magnet materials is expected to reach 94,300 tons.
    
CCID Research Institute Yuan Kaihong raw material industries, said that although China's rare earth permanent magnet production ranked first in the world, but the market share of high-performance permanent magnet materials less than 10%. Many provinces even without resources and core technology, it has still a large number of new construction projects NdFeB, resulting in a more serious homogenization of vicious competition phenomenon.
    
China Rare Earth Association, Gan Yong called around for prudent investment in low-level permanent magnet industry, should guide investment to the use of rare earth materials transfer components and end products, or to encourage new investment and joint venture financing of existing enterprises, to avoid blindly increasing capacity.


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Baotou held the 5th China Baotou Rare Earth Industry Forum, Baotou Steel Rare Earth (Group) Hi-Tech Co., general manager Zhang describes the current situation of foreign rare earth resources, and the cost advantage of China's rare earth ore carried out a detailed analysis that , the future of light rare earth supply is likely to remain China's rare earth era.

China's rare earth mine production costs are much lower than foreign rare earth ore. With Bayan Obo iron mining, ore-situ leaching of heavy-ion technology is not comparable foreign rare earth mine. Almost all foreign rare earth project is rare for a single product project. Foreign mining methods in a project to re-open pit blasting style and ground-based exploitation.