China’s government may soon approve a proposal to form a massive rare earth corporation.
Inner Mongolia Baotou Steel Rare-Earth, China’s top rare earth producer, plans to establish China North Rare Earths, together with important rare earth producers in Gansu, Sichuan and Shandong provinces, in order to bring light rare earth resources in the northern region of the country. This group of northern companies will also take part in the restructuring of rare earth enterprises in the provinces located in the southern part of the country, which play an important role in China’s industry due to their heavy rare earth production.
China plans to create two or three such mega-corporations, consolidating rare earth companies in the sector. Besides the consolidation of the industry, China has other measures to control environmental damage, promote the sustainable development of the sector and stave off resource depletion. The measures adopted include export quotas, higher resource taxes, output caps and stricter emission standards.
Currently, China is the largest rare earths producer in the world, providing over 90% of the global demand for the metals, although its reserves are only accounting for 23% of the world’s total.