The Chinese government has announced that its plans to restructure the country’s rare earth mining industry will be completed by summer 2016.
As the world’s largest producer and exporter of rare-earths, China has had a number of problems managing its resources. Companies flooding the market have led to over-capacity, which is blamed for falling prices, and there have been issues with illegal mining and smuggling.
“But beyond excess capacity, illegal mining and illegal production also have a huge impact on the industry. Certain raw ores are illegally dumped by individuals as recyclable materials, then later extracted. This has formed an illegal industry chain which has a very bad influence on the development of China’s rare earth industry. So, we need to crack down on that,” Chen Zhanheng, Vice Secretary General of China’s Rare Earth Industry Association, is reported by news service CRI as saying.
In 2014, the Chinese government singled-out six different rare-earth industry leaders, promising them support to create large rare-earth producers by buying-up small-scale operations.
At a recent meeting, Xin Guobin, China’s Vice-Minister of Industry and Information Technology, is reported to have said that consolidation is already underway. “To deal with current problems in China’s rare earth industry, we are consolidating and upgrading the industry in terms of production and mining procedures. So far, three firms have already formed rare-earth blocs, while another three are still working on it.”
Xin Guobin stated that it is the government’s hope this will be completed by the summer. “By the end of June we must complete the consolidation of all rare earth mines and firms in China. While this happens, we will continue to work with the companies through our various ministries to support the newly-formed rare-earth blocs, especially those who finish their consolidation on time. ”
The Ministry of Industry and Information Technology has stated that it expects there will be a reduction of rare-earth smelting this year through improved output controls and increased competitiveness. It was also reported that Chinese authorities stated that the country’s rare-earth industry will have the world’s best technology in use by the end of 2020.