The Chinese government drafted a proposal in November 2014 to
impose a 22% value tax on light rare earths and a 35% tax
rate on heavy rare earths.
China’s resource tax on light rare
earths, including bastnaesite and monazite, has been at Chinese
renminbi (Rmb) 60/tonne ($9.60/tonne*) since April 2011,
tax on medium and heavy rare earths at Rmb
Experts believe that Beijing’s tax
reform will boost rare earths prices, which have bottomed in
the last four months. However, others are concerned that the
tax may add an extra burden on qualified producers and lead to
increased illegal mining.
The government has not included rare earths in
the list of commodities recently revised by the Ministry of
Commerce as open to foreign investment.
Consolidation plan moves
China Minmetals Corp. received the go-ahead to
implement its rare earths consolidation plan in early December
According to the plan, which was approved by the
Ministry of Industry and Information Technology (MIIT), the
company’s subsidiary, China Minmetals Rare Earth
Group Co. Ltd, will form a large enterprise group, involving
firms across the domestic supply chain.
The group, which will trade under the name of
Minmetals Rare Earth Holdings Ltd, consists of 31 companies,
located in Guangdong, Jiangxi, Hunan, Yunnan, Fujian and
Its assets include eight separation plants, one
exploration right, three mining rights and various processing
enterprises, which produce magnetic, luminescent and electronic
In addition, the Minmetals Rare Earth Research
Institute, which will study new rare earths applications, will
also be part of the group.
The company started its rare earths business in
1973 and has become the world-leading producer of heavy rare
earths, including dysprosium and terbium, from ionic clay
deposits in southern China.
In December 2014, MIIT also approved Guangdong
Rare Earth Group’s consolidation plan.
The company, a wholly-owned subsidiary of
Guangdong Rising Assets Management Co. Ltd, said that it will
protect and make full use of rare earth resources to promote
rare earth industrial upgrading.
The approval corresponds to a further step
towards the completion of a governmental policy, which
encourages the formation of six large rare earth
groups within China, led by Aluminium China Corp.
(Chinalco), Xiamen Tungsten, Inner Mongolia Baotou Rare Earth
Steel Hi-tech Co. Ltd, Guangdong Rare Earth Group, Ganzhou Rare
Earth Group and China Minmetals Corp.
"Currently, six rare earth groups control 94% of
China’s total rare earth resources and 75% of the
mines," Yinsong Jia, director of the MIIT’s rare
earth office, told China news television programme,
"The smelting and separating capacity of the six
groups account for nearly 60% of the rare earths industry, but
after the consolidation, this will be controlled by the six
groups," he added.
*Conversions made December 2014
Rare Earths News Review
NFC’s Southern Rare Earth
NFC’s Southern Rare Earth (Xinfeng)
Co. has announced the development of a rare earth separation
facility in Guangdong with a production capacity of 7,000 tpa
rare earth oxides.
The project, which cost Rmb 612m ($97.9m), was
approved by the National Development and Reform Commission.
Analysts from the Chinese consulting service CI
Consulting considered the move a potential "additional source
of overcapacity" in the rare earths market.
Dingli Technology Development
Shanghai Dingli Technology Development (Group)
Co. Ltd will develop a facility to produce neodymium-iron-boron
(NdFeB) magnets in Guangxi province.
It will build the facility in the Chenxi New
Material Technology Industrial Park, and expects to produce
2,000 tpa of magnets.
China Rare Earth Holdings
Rare earths and refractories manufacturer, China
Rare Earth Holdings Ltd’s 95%-owned subsidiary,
Yixing Xinwei Leeshing Rare Earth Co. Ltd, is to divest its
subsidiary Dongye Rare Earth Co. Ltd for a total value of Rmb
"Having considered the financial position of
Dongye Rare Earth, we believe that the disposal is one of the
steps in enhancing the efficiency in the operations of the
group. We are still cautiously optimistic about the rare earth
market," Quanlong Jiang, China Rare Earth’s
chairman, said in a statement.
Hong Kong-headquartered China Rare Earth Holdings
produces rare earth oxides (REOs) and refractory products,
including high-temperature ceramics, fused magnesium-chrome
bricks and alumina-graphite bricks.
Its annual capacity reaches 6,500 tpa REOs and
100,000 tpa refractory products.
China Rare Earth Holdings said it saw a 45%
decline in rare earths sales volume, to 1,200 tonnes in H1
2014, due to the persistent weak demand for downstream products
and lower average selling prices, which decreased by 10-30%
y-o-y for yttrium and europium oxides, and 20-60% for
lanthanum, cerium, neodymium and praseodymium oxides.
Prices still falling despite higher
China rare earths exports in October amounted to
4,460 tonnes, up 6.8% compared with the same period in 2013,
according to data released by China’s General
Administration of Customs.
From January to October, the country exported a
total of 46,970 tonnes rare earths, up 24.3% compared with the
same period in 2013.
However, the average export price from
China’s Inner Mongolia Baotou dropped by 26.6%
y-o-y, to Rmb 47,000/tonne ($7.52/kg), according to China
Prices for dysprosium, terbium and gadolinium
remained stable y-o-y, the company said.
Updated rare earths prices can be found on the
IM Pricing Database.