China’s plan to improve the prospects of its unprofitable rare earth industry includes consolidating more than 100 scattered firms into two giant companies, Annie To, executive director of Hong Kong-listed China Rare Earth, told South China Morning Post.
She commented that two new firms would be created, one in the north led by Inner Mongolia Rare Earth High-Tech and a southern company led by either Yue Long Rare Earth & Chemical Industry or Jiangsu’s Yixing Xinwei Leeshing Rare Earth. Yixing Xinwei is 90 per cent owned by China Rare Earth.
Only 10 out of the more than 100 domestic rare earth product makers are making a profit. The top producers are impacted by unprofitable firms, many of which are subsidised by provincial governments and make inferior products. To said that according to some surveys, China’s production of rare earths now satisfied 80-90 per cent of total world demand, while others showed that Japan accounted for around 40 per cent of global sales. This can be explained by the fact that Japan imports rare earth products from China for further processing.
Rare earths have a wide range of applications in industries such as metallurgy, petroleum, glass and ceramics.