China to consolidate rare earths firms into three "conglomerates"
China will establish two or three large rare-earth enterprises by consolidating companies in the sector according to Miao Wei, minister of industry and information technology.
The first large rare-earth enterprise had already been created in the Inner Mongolia autonomous region by consolidating 14 related companies under the leadership of Baotou Steel Rare-Earth Hi-Tech Co.
The plan involves an industry regrouping that will cover firms in more than 10 provinces. The domestic industry's value stands at an estimated 40 billion yuan ($6.35 billion).
Although its rare-earth deposits account for only 35 percent of the world's total, China remains the world's largest rare-earth exporter. It accounts for more than 90 percent of global output of the 17 rare-earth metals, which are used in the electronics, defense and renewable energy industries.
The country said last year it would tighten up regulations on exploration, processing and environmental protection related to rare-earth exports, with officials saying that the move was primarily motivated by environmental concerns and was in compliance with World Trade Organization rules.
According to Miao, after the rationalization, export quotas will be set in accordance with the annual production amount, which is also in line with WTO rules.
Miao said that the rare-earth export quota in 2012 would be the same as in 2011. The full-year quota for 2011 was 30,184 tons, but actual exports amounted to just half of the quota.
He said "it is totally groundless to blame China for not selling or controlling rare-earth exports. The fact is that many foreign firms are cutting their usage."
In response to China's rare-earth regulations, foreign countries are stepping up new policies to cope.
Japan, the world's biggest importer of rare earths, will provide 5 billion yen ($65 million) in subsidies for projects that reduce the need for the elements as it aims to cut its reliance on imports to meet demand.
The funds will support projects that reduce the consumption of magnetic products that use dysprosium and neodymium, improve recycling and develop new technologies, according to a statement from the Ministry of Economy, Trade and Industry in February.
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