Rare Earth Mining Warrants Shrink Nearly Half, State-owned Enterprises Failed to Compete with Local State-owned Enterprises

On December 17, the Ministry of Commerce website published the “2013 List of Rare Earth Export Enterprises Online” (hereinafter referred to as the “Export List”), and announced that it will continue to use the 2012 rare earth calculation method and calculate the first batch of 2013 according to the export performance of the enterprise. Export quotas. The number of companies that have been identified and pending review is 25 and 4, respectively, and the total number has decreased slightly from this year.

At the same time, on December 13, the official website of the Ministry of Land and Resources released news to further confirm that in order to increase the protection of rare earths and other advantageous minerals, the national rare earth mining rights will be reduced from 113 to 67.

In this battle of shrinking mineral rights, the game between central enterprises and local state-owned enterprises has become the focus. Yuan Zhibin, researcher of China Investment Advisor Metallurgical Industry Research Co., Ltd. believes that local governments hold the upper hand because local governments control the local rare earth resources.

There is not much suspense about the newly released “export list” by central enterprises, and Minmetals Nonferrous Metals, Sinosteel Group, China Nonferrous Metals Import and Export Corporation, Chinalco and other central enterprises have all been short-listed, while the local rare earth operation platform includes Baotou Steel Rare Earth and Guangyang. Non-ferrous metals are also on the list, and the failure of some local companies has little effect on the overall pattern.

In 2012, the total amount of rare earth export quota issued by the Ministry of Commerce was 30,996 tons. In fact, the head of a rare earth separation company in Chenzhou revealed to reporters that the overseas market's demand for rare earth products in China has dropped sharply this year, leading some companies to export this year. The quota has not been used up.

Returning to the industry itself, since the Ministry of Industry and Information Technology proposed the goal of “integrating rare earth enterprises into 2-3 large-scale enterprises”, the integration of rare earths in the south has been in an anxious state, and the game between central enterprises and local state-owned enterprises is intensifying.

On September 13 this year, the Ministry of Land and Resources issued an announcement stating that, according to the requirements of the "Notice of the Ministry of Land and Resources on Implementing the State Council's Circular on Several Opinions on Promoting the Sustainable and Sound Development of the Rare Earth Industry," the list of "Rare Earth Exploration Rights" has been verified. And "list of rare earth mining rights" to be announced. Among them, there are 10 rare earth prospecting certificates, 3 in Jiangxi, 2 in Gansu, and 1 in Fujian, Guangdong, Guangxi, Inner Mongolia, and Sichuan.

The rare earth mining rights have been reduced from 113 to 67, of which 45 are in Jiangxi, 7 in Sichuan, 5 in Fujian, 3 in Guangdong, 2 in Yunnan, and one each in Hunan, Guangxi, and Shandong.

Yuan Zhibin believes that the contraction of mining warrants is another important step after the state issued a series of policies to integrate rare earth industries, pushing the process of rare earth integration to the fast lane.

From the perspective of the allocation of mining warrants, the number of state-owned enterprises has been reduced. Although Minmetals obtained a mining warrant in Hunan through Minmetals Rare Earth Jianghua Co., Ltd., it was blocked outside Jiangxi, the largest rare earth market. An industry analyst told the reporter that in the six provinces with rare earth resources in the south, Hunan’s rare earth reserves ranked the lowest, and the proportion of reserves in the country would not exceed 5%. Prior to the Xiamen Tungsten industry's competition for Fujian rare earth resources, Minmetals was also forced to go out.

China National Aluminium Co., Ltd., a Guangxi non-ferrous metal group jointly established by Chinalco, Guangxi Nonferrous Metals Group and Youzhe Rare Earth New Materials Co., Ltd., acquired a mining license in Guangxi, which seems to have more significance. The company already owns Lithium-rich ionic type rare earth ore reserves.

In addition to this, other state-owned enterprises have completely eliminated the competition for mining rights, and local state-owned enterprises have become the dominant players in the future.

Among them, 43 of the 45 mining warrants in Jiangxi Province were owned by Zhangzhou Rare Earth Minerals Group, and this year, once impacted by IPO, another Ruzhou rare earth enterprise, which was later blocked in July, passed through its subsidiary Changting County. Ltd. obtained mining rights in Fujian. Jiangxi Jiangxi Copper Group Co., Ltd., another nonferrous metal giant, obtained a mining license in Sichuan only through Sichuan Jiangtong Rare Earth Co., Ltd.

In the Fujian market, of the five mining warrants, the Xiamen Tungsten Industry controlled only one piece by Fujian Sanming Rare Earth Materials Co., Ltd. The Guangdong Province's platform for the integration of rare earth resources has also acquired three Guangdong mining warrants through its three subsidiaries. A mining warrant in Sichuan was obtained from Xichang Zhineng Industrial Co., Ltd., a subsidiary of Tibet Development.

The price of rare earth has reached the bottom. In terms of price, the above-mentioned person in charge of the Zhangzhou segregated company told the reporter that the price of rare earth ore has dropped from the current peak of RMB 380,000 per tonne in 2011 to the current RMB 150,000 per tonne. The transaction price is 120,000 yuan. He believes that the biggest drop in prices is due to a drop in demand. At present, the largest demand for rare earth products in China originates from the Japanese market, and the industry is seriously affected by exports. After China restricted the export of rare earth products, the recovery of rare earth production in the United States led to an increase in the purchase of rare earth by Japan. In the domestic market, the segregated company's current inventory has not yet been used up and there is no demand for purchases.

The above-mentioned business people told reporters that the current mining cost of rare earth is about 80,000 yuan / ton, not counting all kinds of management expenses, and the selling price of 120,000 yuan / ton has also made the enthusiasm of current business owners to be affected. Some of the original miners have joined the real estate industry to extract higher profits.

And Yuan Zhibin believes that due to the influence of excess capacity, rare earth prices have been declining since the beginning of the year. Under the effect of a series of tightening policies, rare earth prices are expected to bottom out at the end of the year.