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INNER Mongolia Baotou Steel Rare Earth Group, China’s biggest producer of rare earths, said Friday that it has acquired nine rare earth mining firms from the local government of the Inner Mongolia Autonomous Region.
It isn’t clear how much volume the nine firms would add to Baotou Steel Rare Earth’s portfolio, which already accounts for about 53 percent of China’s total output.
Analysts say the purchases look to be the finishing touches to Baotou Steel Rare Earth’s achieving dominance in the northern region before it embarks on absorbing capacity in Sichuan Province.
The firm said, in a filing to the Shanghai Stock Exchange, that it will “properly manage the strategic conservation and development of rare earth resources to set the foundation for a national rare earth group.”
Baotou’s consolidation of regional miners comes as Xinhua said Friday that China will set up a group to coordinate rare earth production quotas, mining permits and other policies.
Baotou Steel Rare Earth, China Minmetals Corp., Aluminum Corp. of China, Ganzhou Rare Earth Group Co., Guangdong Rising Nonferrous Metal Co. and Xiamen Tungsten Co. are included in the group. The six producers account for about 85 percent of China’s rare earth production.
China produces more than 90 percent of the world’s rare earth metals, a group of 17 elements used in a wide range of applications in sectors like renewable energy, telecommunications and defense.
But the country’s rare earth industry has been plagued by smuggling and unlicensed players, according to government officials, contributing to pollution and low prices despite the supply dominance. Analysts estimate that 80 percent of China’s rare earth miners, processors and traders are unlicensed.
Since 2010, China has tried to improve industry regulation, imposing tough new production and export quotas, raising environmental standards and cracking down on smuggling. It has also sought to consolidate miners under the control of a small number of State-owned producers. (SD-Agencies)
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