14 C
Belgrade
Supported byspot_img
spot_img

China’s rare earth industry: The path to consolidation

Member of Europium Groupspot_img
Supported byspot_img

China’s supremacy in the rare earth industry is undeniable, with the country boasting the world’s largest known deposits of these critical minerals and maintaining a virtual monopoly on their mining and processing. The Bayan Obo mine in Baotou, Inner Mongolia Autonomous Region, stands as a testament to China’s dominance, earning the moniker “world capital of rare earths” through decades of strategic planning and political decisions.

The foundation of China’s current rare earth dominance was laid in the 1950s with the country’s nuclear program. Technological advancements in the subsequent decades led to the development of methods for separating raw rare earth materials, shifting the global division of labor. China transitioned from exporting raw materials for processing to becoming the primary processor of rare earths. By the mid-1980s, China had surpassed the United States as the world’s leading producer of rare earths, resulting in overcapacity and a subsequent drop in prices that led to the closure of several mines globally.

Despite its dominance, China’s rare earth industry faced challenges, including a fragmented market with thousands of mines competing fiercely and often disregarding environmental regulations. To address these issues and gain more control over pricing and quality, the Chinese government initiated a consolidation plan in 2002, aiming to streamline the industry and enhance its influence.

Supported by

The consolidation efforts focused on creating two large companies for rare earths, one in the north and one in the south, based on the regions’ distinct mining characteristics. The plan encountered resistance, particularly in the south, where numerous companies operated independently. However, gradual progress was made, with the number of licenses issued decreasing, and exports becoming more centralized under government authorization.

China also tightened export quotas on rare earths, leading to international disputes and a subsequent ruling against China by the World Trade Organization in 2014. Despite these challenges, China continued its consolidation efforts, culminating in the formation of the “Big Six” companies dominating the industry by 2016.

In 2021, three of the Big Six merged to form the China Rare Earth Group (CREG), consolidating further control over the industry. The final step in the consolidation process occurred in 2024 with the takeover of Guangdong Rare Earth, leaving only two companies with official production quotas: the China Northern Rare Earth Group in the north and the China Rare Earth Group in the south.

Overall, China’s rare earth industry consolidation reflects a strategic effort to enhance control, streamline operations, and assert dominance in the global market.

Supported byElevatePR Digital

Related News

Shenghe Resources expands global influence with acquisition of Tanzanian mineral sands projects

Shenghe Resources, a prominent Chinese rare earth company, is continuing its strategic global expansion by acquiring interests in various rare earth and mineral sands...

Addressing political risks in the critical minerals market

Investors can manage a variety of risks, including those related to construction, interest rates, weather, and even market price movements through hedging. However, one...

Domestic tungsten mines accelerate commercial production amid market surge

The commercialization of domestic tungsten mines is gaining significant momentum as the international market for tungsten continues to surge. The Uljin Ssangjeon Mine, a...

Serbia’s lithium wealth: Navigating global power struggles amid US-China trade tensions

The intensifying trade conflict between the United States and China over lithium resources, critical for the burgeoning electric vehicle industry worldwide, has thrust Serbia...
Supported by
Supported by
Supported by
error: Content is protected !!