Government tightens controls on rare earths
Government tightens controls on rare earths
08:34, June 02, 2010 
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Strategic rare earth minerals will only be mined by a few select State-owned enterprises (SOEs) as part of the government's bid to crack down on illegal exploitation and consolidate reserves, according to sources close to the matter.
The Ministry of Industry and Information Technology and the National Development and Reform Commission have sent the draft plan to the State Council for approval.
"Once approved, the Ministry of Land and Resources (MLR) will issue licenses and start allocating the resources to those companies," said a source, who refused to disclose names of the short-listed enterprises. "Private enterprises can only collaborate with the selected firms through shareholding."
The restructuring will make the industry focus on more valuable ion-absorbed type rare earths in the southern parts of the country.
China produces 97 percent of global supply of rare earths that are composed of 17 elements and are indispensable in many high-tech arenas ranging from wind turbines and hybrid cars to missiles and mobile phones.
But the minerals' price rose by only a little more than 20 percent from 1979 to hit an average of $8,500 per ton in 2009 despite soaring demand that has tripled to 120,000 tons in the past decade.
"The mineral is very much undervalued because of over-exploitation and improper management. So the latest proposal is critical and will benefit the whole industry," said Zhang Anwen, deputy secretary-general of the Chinese Society of Rare Earths.
The MLR announced in March that production of rare earths will be capped at 89,200 tons in 2010, up 8.36 percent from 2009. The government has also stopped issuing new licenses for domestic exploitation of rare earths until June 30, 2011.
Analysts and industrial experts said that Inner Mongolia-based Baotou Steel Rare-Earth High-Tech Co is likely to monopolize reserves of light rare earth elements in the autonomous region. The company controls most of the rare earth resources in the northern parts of the country.
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The Ministry of Industry and Information Technology and the National Development and Reform Commission have sent the draft plan to the State Council for approval.
"Once approved, the Ministry of Land and Resources (MLR) will issue licenses and start allocating the resources to those companies," said a source, who refused to disclose names of the short-listed enterprises. "Private enterprises can only collaborate with the selected firms through shareholding."
The restructuring will make the industry focus on more valuable ion-absorbed type rare earths in the southern parts of the country.
China produces 97 percent of global supply of rare earths that are composed of 17 elements and are indispensable in many high-tech arenas ranging from wind turbines and hybrid cars to missiles and mobile phones.
But the minerals' price rose by only a little more than 20 percent from 1979 to hit an average of $8,500 per ton in 2009 despite soaring demand that has tripled to 120,000 tons in the past decade.
"The mineral is very much undervalued because of over-exploitation and improper management. So the latest proposal is critical and will benefit the whole industry," said Zhang Anwen, deputy secretary-general of the Chinese Society of Rare Earths.
The MLR announced in March that production of rare earths will be capped at 89,200 tons in 2010, up 8.36 percent from 2009. The government has also stopped issuing new licenses for domestic exploitation of rare earths until June 30, 2011.
Analysts and industrial experts said that Inner Mongolia-based Baotou Steel Rare-Earth High-Tech Co is likely to monopolize reserves of light rare earth elements in the autonomous region. The company controls most of the rare earth resources in the northern parts of the country.
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