| Rare earths
mining in Baotou.
A number of Chinese provinces have announced plans
throughout January to take special action against illegal rare
earth mining following an announcement from central government
Preventative action in the form of inspections is expected
to take place between December 2016 and April 2017 in provinces
including Sichuan, Inner Mongolia, Hunan, Shanghai, Jiangsu,
Shandong, Fujian and Gansu.
Most provinces have made similar announcements around the
inspection of rare earth oxide sources, inventory status,
production quotas compared to actual output, sales amounts, VAT
invoice details, and export prices.
Factories without production quotas, special rare earth sale
or purchase invoices, resource tax invoices, or source material
proof will be forced to stop production.
The inspections will also apply to larger rare earth
companies including the biggest six rare earth groups in
Production will be cut off and quotas will be deducted this
year if a company’s sales and output do not
correspond or if a company exceeds its production quota. If the
selling price of rare earth exports arouses suspicion, the
company will be subject to further inspections.
A black list will be created on a provincial level and
companies on the list will be affected in terms of credit,
listing, rating, loan, entry standards and quotas.
The Chinese media has also been encouraged to expose any
illegal activities, while reports from civilians will be
In theory, all companies will be checked, including 44
smelting and separation companies (two of which are not in the
big six group), with a total production quota of 100,000 tonnes
in 2016, and 17 rare earth mineral companies (one of which is
not in the biggest six), with a total quota of 105,000
Jiangsu Province has created an additional list of 41
companies including export companies, 23 of which will be
inspected specifically. Inner Mongolia has a list of 38
companies, three in Hohhot, 33 in Baotou and two in
Another aspect of investigation will be into the purchasing
and processing of illegal rare earth minerals labelled as
"general use and recycling". As such, in-situ sampling
inspections are planned and production will be halted if
material specification does not match purchased source
China’s REE industry "on
China’s rare earth sector saw notable trading
activity in 2016, shaped by a wave of strategic policies
implemented throughout the year, although prices remained low,
according to the China Nonferrous Industry Association.
| Rare earths
magnets. (Source: Clarence Rischer)
Speaking at the 2016 Rare Earth Industry Analysis event held
in Beijing on 16 December, Quanxun Chen, director of the
association, stated that progress was being made in reforming
the supply side of the sector.
Led by policies regulating rare earth environmental
inspections and operating conditions, some capacities were
eliminated, including plants that failed to meet
environmental standards, had low profits and those that were
Quanxun pointed to the active import and export market.
From January to October 2016, imported rare earths smelting
and separation products rose 47% year-on-year (y-o-y) to
14,000 tonnes, while exports were 43% higher y-o-y at 38,000
Downstream rare earth functional material exports continued
to post growth while permanent magnet exports increased 15% to
This shows a degree of recovery in both upstream and
downstream markets, he added, citing how preliminary products
like oxide and rare earth salt are now more competitive,
generating momentum for the development of further processing
capability in China.
At the same time, market prices remained low, with most
prices of rare earth products decreasing in 2016.
The average prices for neodymium, dysprosium, and terbium
oxide stood at Chinese renminbi (Rmb) 250,000/tonne,
($3,656/tonne) Rmb 1.25m/tonne and Rmb 2.62m/tonne respectively
from January to November, down 5%, 17% and 18% y-o-y, according
Nong Xia, inspector and representative for China National
Development and Reform Commission, reassured delegates that the
authority values the rare earth sector and took action in 2016
to foster its development, including the national rare earth
storage programme, a construction fund and by supporting
technological advancement and industrial upgrades.
During the event, the founding of a rare earth branch of the
China Nonferrous Industry Association was announced. Quanxun
explained the significance of the branch within the
association by noting that four of the six largest rare earth
companies in China are non-ferrous metals companies.