Guangdong to Build a Rare Earth Industry Chain

On February 27, Guangdong Rare Earth Industry Group (GREIG), which is China’s first large group spanning the whole rare earth industry chain, was set up in Guangzhou. Since the State Council put forward the largeenterprise (group) strategy for the rare earth industry last year, relevant ministries and commissions have been working on the new layout of China’s rare earth industry. The establishment of GREIG signifies the start of resource integration, structural optimization and transformation/upgrade in Guangdong’s rare earth industry, and it is also an important measure taken by Guangdong to gain a foothold in China’s rare earth industry.

In the past two decades, China’s rare earth industry has undergone the transition from large-scale disorderly exploitation, export at low prices, and extensive utilization to the introduction of quota management system for rare earth exports, encouragement of the application of downstream rare earth products with high value added. In recent years, China has further stepped up macro-control and guidance over the rare earth industry. In May 2011, the State Council issued the Opinions on Promoting the Sustainable and Healthy Development of the Rare Earth Industry, which is perceived as the guidelines of China’s rare earth industry.

The document points out that in 1-2 years the rare earth industry will “establish an order for rare earth resource development, smelting separation and market distribution”; “basically form an industry layout dominated by large enterprises, with the industry concentration of the top three enterprise groups topping 80% in the southern ionic rare earth industry.”

After that, information on China’s planning the new layout of the rare earth industry has been attracting attention in the industry. Recently, sources disclosed that currently the MIIT is playing a leading role in mapping out specific scenarios for large rare earth enterprise groups. In the principle of market-based operation and one-by-one approval upon maturity,with enterprises playing a leading role, it will facilitate the incorporation and development of large enterprise groups, and strictly control the number of large enterprise groups.

Guangdong has taken the lead to gain a foothold in the new layout. It is learned that currently among numerous enterprises in the industry, only GREIG contains the words of“rare earth”, “industry” and “group” in its name. Yesterday, an industry insider told the reporter that the establishment of GREIG showcased the strength of Guangdong’s rare earth industry.

According to a local rare earth expert, Guangdong boasts a greater variety of rare earth resources than anywhere else in China, with the heavy rare earth as the major one, which is rarely seen worldwide. It is estimated that Guangdong has more than 9 million tons of rare earth reserves, with 525,000 tons of cumulative reserves of ionic rare earth (REO), ranking first in China. With regard to the production and smelting separation strength of midstream rare earth products, with annual mining capacity of nearly 3,000 tons, Guangdong has become an important supplier of ionic rare earth products in China.

With regard to the deep-processing and application of downstream rare earth products,Guangdong leads the country in the application of rare earth functional materials. In 2011, the output value of Guangdong’s rare earth industry reached 50 billion yuan, and the output value of downstream application topped 1.5 trillion yuan. The province also has solid strength in rare earth R&D, playing a leading role in the country in the fields of rare earth luminescent materials and rare earth hydrogen storage materials.

In 2011, Guangdong set up its provincial rare earth office. It is learned that Guangdong has mapped out its overall planning for the rare earth industry.

Data show that during the 12th five-year plan period, Guangdong plans to extend the rare earth industry chain and improve the value added of rare earth products, aiming at a rare earth R&D production base and application center with significant influence worldwide.