The Integration of Rare Earth Industry in Ganzhou Concluded;the “4+1”Industrial Structure Emerged.

On March 30th, the Ganzhou Rare Earth Group in Jiangxi went into formal operation. People present at the meeting said that the meeting was in fact a non-official opening ceremony of the group, which indicated a low profile of the group. Zhang Anwen, deputy secretary general of the Chinese Society of Rare Earths said that the establishment of this group showed that the integration platform of Ganzhou’s rare earths industry had been created and the main body of integration had formed a“4+1” structure. According to an authority from China Nonferrous Metals Industry Association, the main part of the integration had been factually completed,but it was not publicized. The journalist learned that the main body involved in the “4+1” structure includes Baotou Steel Rare Earth, Chinalco, Guangsheng Nonferrous Metal Corporation as well as Ganzhou Rare Earth Group.

According to people present at the field meeting for the improvement and integration of Ganzhou rare earths industry, the Ganzhou Rare Earths Group, including Ganzhou Rare Earths Mining Company, is the only miningright owner in Ganzhou at present, which possesses all 44 certificates of mining right in Jiangxi. In the following step, the group will comprehensively integrate the downstream smelting and separating enterprises and applying enterprises to bring 70-80% of the rare earths mining and smelting capacity in Ganzhou under its control, with a planned output of approximately 40,000-60,000 tons. The mandatory plan of state for exploiting rare earths in 2012 was 90,000 tons.

Before this, it was not decided on which enterprise will serve the integration platform for the medium and heavy rare earth in Ganzhou of Jiangxi Province, which was the reason that the central and local enterprises have been engaged in fierce competition. Many enterprises including Baotou Steel Rare Earths Co. Ltd. intended to win the competition but failed eventually.

According to Several Opinions on Promoting Sustainable and Healthy Development of Rare Earth Industry promulgated by the State Council issued in May 2011, the state would spend 1 to 2 years establishing a standard order for rare earths development, smelting separation and market circulation. “A rare earth industrial structure led by large scale enterprises will be basically formed, and the industrial concentration of top three enterprises in ion-absorption type rare earth in the south of China will reach above 80%.

National rare earths integration started from then. Chalco, China Non-ferrous Metal Corporation, Jiangxi Copper Corporation, Guangsheng Non-ferrous Metal Corporation as well as Ganzhou Mining Corporation all joined this wave of acquisition of rare earths enterprises,scrambling for the top three places.

Zhang Anwen said that at present the main bodies of rare earths integration have formed a“4+1”structure. The “4” in the south are Chalco which integrated rare earths enterprises in Jiangsu, Guangsheng Non-ferrous Metal Corporation which integrated those in Guangdong,Ganzhou Rare Earths Group which serves the integration platform for Ganzhou rare earth resources, and Minmetals which merged several rare earth enterprises in Jiangxi, Guangxi, Hunan and intended to take part in the integration of Guangdong. Another “1” is the major body of northern integration—Baotou Steel Corporation.

In the above-cited five main bodies of integration, Ganzhou Rare Earths Corporation and Baotou Steel Corporation have obvious advantages in rare earth resources, with two strongest corporations dominating the south and north of China respectively.

The rare earths of China, according to their weight, fall into two categories. Those in the north are light, including those in Baotou of Inner Mongolia, Liangshan of Sichuan Province, Huishanhu of Shandong Province. Those in the south are heavy, with Ganzhou of Jiangxi Province as the center. The core enterprise of light rare earths in the north—Baotou Rare Earths Corporation—is vigorously promoting combination with enterprises in Sichuan Province and Shandong Province, striving to organize a northern rare earths group as soon as possible.

According to statistics, Bayan Obo rare earths mine belonging to Baotou Steel Corporation in Inner Mongolia is the largest one in China, with reserves accounting for 87.7% of the total.With the accelerated pace of Baotou Steel Corporation in integrating rare earths in the north,the reserves of rare earths owned by it will increase.

The reserves of medium-heavy ion-absorption type rare earths in Jiangxi, mostly in Ganzhou,account for 40% of the national total. The mining rights of Ganzhou rare earths are all possessed by Ganzhou Rare Earths Group.

In addition, reserves of non-ferrous metal owned by Guangsheng is also very large . In comparison, Chalco, as one of the five main bodies of integration, has relatively small volume of rare earths.