Industry leader calls for consolidation of China's rare earth industry (2)

12:20, March 06, 2011      

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Zhou said earlier in January that China Minmetals, whose export and production of medium-heavy rare earth ranked at the top of the local industry last year, would acquire more rare earth mines to enhance the proportion of upstream resources.

Export quotas, subsidies on interest payments, fiscal subsidies and tax preferences should be utilized to encourage firms to make technological innovations, said Zhou.

Zhou's appeal came after a statement released at the end of an executive meeting last month by China's State Council, or the Cabinet. The statement said that the country would strive to consolidate its rare earth industry within five years.

Premier Wen Jiabao, who chaired the meeting, said China would promote new technologies in the industry and accelerate the pace of mergers and acquisitions between rare earth producers under a five-year plan.

The statement also said that would toughen measures to control the mining of rare earth and raise environmental standards. Further, the country would continue to cap production and exports with the quota system.

The MLR announced in January the establishment of eleven state-managed rare earth mining zones in Ganzhou of east China's Jiangxi Province to protect resources and the environment. The area is rich in ion-absorbed-type rare earth.

As the world's largest rare earth producer and exporter, China provides more than 90 percent of global rare earth demand, though its reserves account for only one-third of the world's total.
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