Rare earth sec­tor plans more higher value-added prod­ucts

China Daily (USA) - - BUSINESS - By YANG ZIMAN yangz­i­man@chi­nadaily.com.cn

China’s rare earth in­dus­try has to pro­duce more high-end prod­ucts by fur­ther re­duc­ing the num­ber of pro­duc­ers in the next five years, ac­cord­ing to the 13th Five-Year Plan (2016-20) for the in­dus­try re­leased by the Min­istry of In­dus­try and In­for­ma­tion Tech­nol­ogy on Tues­day.

Ac­cord­ing to the plan, rare earth with higher added value will ac­count for 50 per­cent of the to­tal out­put by 2020, up from 25 per­cent in 2015.

“The ex­ploita­tion should be con­trolled while the added value should be in­creased,” said Jia Yin­song, di­rec­tor of the min­istry’s rare earth of­fice.

The plan has stip­u­lated that the to­tal min­ing of rare earths in­2020should­benomorethan 140,000 met­ric tons, com­pared with the 105,000 tons limit in 2016.

Ac­cord­ing to the plan, pro­duc­ers’ profit rates are pro­jected to in­crease to 12 per­cent in 2020, from 5.8 per­cent in 2015. The re­search and de­vel­op­ment ver­sus rev­enue ra­tio is seen ris­ing to 5 per­cent in 2020 from 3 per­cent in 2015.

Jia said that the de­mand for high-end rare earths would be driven up by growth in­dus­tries, in­clud­ing those mak­ing high-end equip­ment, new en­ergy au­to­mo­biles and high-per­for­mance med­i­cal equip­ment.

“Chi­naac­counts­formerely25 per­cent of the high-end in­ter­na­tional rare earth mar­ket, in­clud­ing­mag­netic, cat­a­lyst, hy­dro­gen stor­age and lu­mi­nes­cent ma­te­ri­als,” Jia said.

“Europe, the United States and Ja­pan dom­i­nate the mar­ket.”

Jia added that one of the main chal­lenges in the in­dus­try was pri­mary-level rare earth pro­duc­tion over­ca­pac­ity caused by il­le­gal ex­ploita­tion and pro­duc­tion, which has led to low prices.

The plan sets a goal of con­cen­trat­ing the ca­pac­ity among the big­gest six rare earth cor­po­ra­tions by 2020. In the past five years, the num­ber of rare earth smelt­ing and sep­a­rat­ing com­pa­nies has fall to 59 cur­rent from 99 in 2011.

“The rare earth in­dus­try must be con­cen­trated be­cause waste wa­ter and sand man­age­ment is very costly,” said Jia.

“A ma­jor rea­son for the re­cent bank­ruptcy of the only rare earth com­pany in the US, Moly­corp Inc, is the huge cost of en­vi­ron­men­tal man­age­ment,” Jia added.

pro­duc­tion limit for the to­tal min­ing of rare earths in 2020

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