MIIT: Work Focus in This Year is to Properly Handle the Setup of Rare Earth Larg

Recently, Deputy Minister of the Ministry of Industry and Information Technology Su Bo said when attending the China Rare Earth Industry Association Congress that MIIT has, on the basis of survey and research, joined force with related ministries to extensively solicit opinions from all sectors, and put forward the program to establish rare earth large groups,this work will become one of the key tasks for MIIT in 2013.

According to analysts, China is a big supplier of rare earth, judging from the current situation,the supply of mid and heavy rare earth is becoming increasingly tense; globalized competition of rare earth primary products has also intensified. Against the background of shortage in rare earth supply and fierce competition, the establishment of rare earth large groups will further facilitate the development of the entire rare earth industry.

Regarding the plan for establishing rare earth large groups, Su Bo indicated that large group setup plan will adopt existing key enterprises with business involving rare earth as the main body, use assets as the tie, and follow market rules to organize setup. The setup work should give full consideration to each side’s interest,pay attention to mobilizing the initiative of both central and regional enterprises, ensure to improve industry concentration degree, and take care to prevent the formation of resource monopoly.

Su Bo further indicated that the leading enterprises for establishing large rare earth enterprise groups must assume the responsibility to integrate and absorb excessive production capacity within the region, cooperate with local governments to properly solve enterprise “closedown, suspension, merging and business switching”, staff placement, and stability maintenance tasks in the M&A and restructuring process. Large enterprise groups must effectively undertake the obligations to rationally developing and utilizing resources, protecting environment, and pioneering the transition and upgrading of the rare earth industry, thoroughly transform the loose, disorderly, and inferior production pattern in the industry, in order to improve the core competitiveness of China’s rare earth industry.

Regarding the prospects of establishing rare earth large group, Zhu Hongren, member of the Party Group and Chief Engineer of the Ministry of Industry and Information Technology, previously has pointed out that at present, some central enterprises and local key provincial regions involving rare earth business accelerated the pace of M&A and restructuring, for instance provinces like Inner Mongolia, Jiangxi,Fujian, and Guangdong have all set up regional rare earth industrial groups, the concentration degree of rare earth industry further improved,which laid down solid foundation for establishing large rare earth enterprise groups. Relevant ministries of the state government will, based on the completion condition of implementing relevant obligations by enterprises, approve the setup of large rare earth enterprise groups at appropriate time.

Since the State Council promulgated the “Opinion on Promoting Continual Healthy Development of the Rare Earth Industry” in 2011,China has basically fulfilled the interim target of spending 1 to 2 years to establish standardized and orderly rare earth resource development, smelting & separation and market circulation order, initially fulfill the interim target of establishing uniform, standardized, and highly efficient rare earth industry management system.

One analyst of China Merchants Securities pointed out in an interview with the reporter that judging from the current situation, the ful-fillment of interim target laid down a solid foundation for the development of rare earth industry, in the next step development of the rare earth industry, what needs to be done is to erect a building on the solid foundation, this building does not need to be very high and large, instead it needs to be more secure and firm, in other words it should more efficiently and effectively drive forward further development of the entire industry.

The above-mentioned analyst also said that establishing rare earth large group will facilitate to promote industry adjustment and structural transformation in the entire rare earth industry,and expedite future growth trend of the entire rare earth industry by speeding up the transformation of economic development mode. In addition, after establishing large groups, it will become possible to effectively solve some problems which previously had troubled the industry, for instance improving management system inside the industry, promoting technology innovation in the rare earth industry and improving scale economic benefits etc. Furthermore, the formation of large groups will also help improve Chinese enterprises’ competitiveness in the global environment.