Research Report on Chinese Rare Earth Industry 01

    Rare earth (RE) elements are a collection of seventeen chemical elements in the periodic table of the chemical elements, namely lanthanum (La), cerium (Ce), praseodymium (Pr), neodymium (Nd), promethium (Pm), samarium (Sm), europium (Eu), gadolinium (Gd), terbium (Tb), dysprosium (Dy), holmium (Ho), erbium (Er), thulium (Tm), ytterbium (Yb), lutecium (Lu), as well as scandium (Sc) and yttrium(Y) that are closely related to lanthanum (La).Currently, there are near 170 enterprises engaging in rare earth ore exploitation, smelting and separation in China.

    In 2009, the production of rare earth products in China was 129,400 tons (calculated by rare earth oxide), rising by 3.94% YOY. China's rare earth resources account for about 30% in the world. However, about 95% of the rare earth products in the world are produced and supplied by China. In the 1980s, the rare earth smelting and separation technology popularized by the three state-owned rare earth factories in Baotou, Shanghai and Zhujiang spread over China rapidly. The production capacity of rare earth smelting and separation products also expanded swiftly, far exceeding the market demand and forming the situation of oversupply and low-price competition.

    In the 1990s, China began the large-scale exploitation and export of rare earth. With low exploitation cost (ignoring the environment cost), China's cheap rare earth dominates the world market. As a result, most other countries terminated the exploitation of rare earth.Though China is a large rare earth producing country, the development of Chinese rare earth industry lags behind developed countries. Chinese rare earth enterprises mainly produce upstream and midstream products of low added value, high pollution and high energy consumption. They fall far behind developed countries in the production of downstream expensive rare earth devices and terminal application products.

    Due to the extensive management of rare earth resource exploitation and scattered distribution of the rare earth industry, many foreign importers take this opportunity to force down the price. When the global demand for rare earth materials increases year by year, China exported 6,100 tons of medium-end and low-end rare earth products in 1990; the average price was 13,600 USD/ton. In 2009, China exported 36,100 tons of rare earth smelting and separation products, rising by 16.67% YOY. The export value amounted to USD 310 million and the average price was only 8,959 USD/ton.

    Chinese government has begun to formulate the Access Conditions of Rare Earth Industry since 2009. In May 2010, the Access Conditions of Rare Earth Industry (Draft for Soliciting Opinions) was published. In recent years, the concentration of Chinese rare earth industry is improved considerably. A number of large enterprises have set about the amp;A of the rare earth industry. In July 2007, Aluminum Corporation of China merged China Rare Earth Exploitation Company and made the rare earth industry its development focus in the future.