China to cut 90 rare earth firms into 20 by 2015

China Business News reported that the Chinese Central Government will commit to step up efforts in restructuring the rare earth industry, releasing favorable policies as well as encouraging mergers and acquisitions in the industry.

According to the draft plan, China will have incorporated the current 90 firms in the field into 20 by 2015.

Since 2009, the Chinese government has been paying more attention to the development of the rare earth industry. In a guideline, government encouraged mergers and acquisitions in seven industries, and it for the first time, incorporated the industry in the name list.

Mr Zhang Zhong GM of the Inner Mongolia Baotou Steel Rare Earth Hi Tech Co under the Baotou Iron & Steel Group, said that China's rare earth resources should concentrate on the hands of giants in the industry through having organized projects, gradually equally distributing resources and raise international competitiveness.

Currently in China, the industry is at a primarily formed structure. Light rare earth resources in North China are mainly dominated by the Inner Mongolia Baotou Steel Rare Earth Hi Tech Co; middle and heavy rare earth resources in the country's southern regions are mainly controlled by companies such as China Minmetals Corporation.Asian Metal Copyright Mr Zhang Zhong GM of the Inner Mongolia Baotou Steel Rare Earth Hi Tech Co under the Baotou Iron Steel Group, said that China's rare earth resources should concentrate on the hands of giants in the industry through having organized projects, gradually equally distributing resources and raise international competitiveness.Asian Metal Copyright Some other State-owned companies, like the Aluminum Corporation of China and China Nonferrous Metal Mining, are also developing the rare earth business.

According to an insider from the China Minmetals Corporation, the merger of companies in this field is very complicated and many factors have to be taken into account. Also, local governments are not willing to share their resources, especially with outsiders.Asian Metal CopyrightChina Business News reported that the Chinese Central Government will commit to step up efforts in restructuring the rare earth industry, releasing favorable policies as well as encouraging mergers and acquisitions in the industry.Asian Metal Copyright In addition, recent rises in rare earth prices, which enable them to huge profits, lead companies into disfavoring restructuring.

An official from the Ministry of Land & Resources also revealed that the government is organizing some provinces such as Inner Mongolia, Shandong to make a unified supervision plan on rare earth extraction.