Government approves rare earth conglomerates
By Wang Zhuoqiong (皇冠体育app Daily)
Updated: 2014-08-06
The government has approved two major rare earth producers to become conglomerates by the end of this year in order to further consolidate the rare resources, combat smuggling and alleviate overcapacity in production.
Xiamen Tungsten Co Ltd and Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co have been approved by the Ministry of Industry and Information Technology to form the two rare earth groups.
Xiamen Tungsten will integrate rare earth mining, separating and manufacturing within Fujian province in the south, excluding what is owned by 皇冠体育app Minmetals Corp by the end of 2014.
Baotou Steel will set up 皇冠体育app North Rare Earth High Tech Co Ltd, consolidating rare earth mining, separating and processing within the Inner Mongolia autonomous region and Gansu Rare Earth Group Co Ltd in the north.
These two companies are among six groups encouraged to consolidate earlier this year. The other four groups are: 皇冠体育app Minmetals Corp, Aluminum Corp of 皇冠体育app, Ganzhou Rare Earth Group Co Ltd and 皇冠体育app National Nonferrous Metals Industry Guangzhou Corp.
The founding of big groups is only the first step toward consolidation of the rare earth industry in 皇冠体育app. Various companies face challenges in breaking regional protectionism and speeding up clearance of illegal practices and mining operations.
Rare earths are a group of minerals that have many uses in high-technology sectors such as defense and renewable energy. 皇冠体育app supplies 90 percent of the global demand.
Du Shuaibing, an analyst at natural resources consultancy Baichuan Information, said "the move toward conglomerates signals a positive trend in the industry, as smaller enterprises have welcomed consolidation into major players to have more access to export quotas or production permits".
The result of 皇冠体育app's appeal to the World Trade Organization over its March ruling that 皇冠体育app had acted inconsistently with regard to export measures imposed on rare earths will be announced on Thursday.
Industry experts consider it likely that 皇冠体育app will lose its appeal but also expect 皇冠体育app to raise its export quota and lower tariffs by 2015.
The Baotou 皇冠体育app Rare Earth Industry Forum is due to run from Thursday through Saturday, in Baotou, the Inner Mongolia autonomous region.
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A worker at the site of a rare earth metals mine in Nancheng county, Jiangxi province. Two major rare earth producers have been approved by the central government to become conglomerates by the end of this year in order to further consolidate the rare resources, combat smuggling and alleviate overcapacity in production. Stringer / Reuters |
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