Mining limits drive rare-earth investors abroad
Updated: 2011-08-19 10:12
By Yi Bian (China Daily)
Workers at an Inner Mongolia Baotou Steel Rare Earth (Group) High-Tech Co facility. The company wrapped up the consolidation of 35 local rare-earth miners in June.[Photo/China Daily]
BEIJING - Soaring rare-earth prices are drawing increased attention from Chinese private investors, who are being forced to seek opportunities overseas because of tight limits on domestic mining.
A source at Sinom Holdings Co Ltd said the company is considering investing in rare-earth mines overseas, local newspaper China Business News reported on Wednesday.
Another company, Ganzhou Qiandong Rare Earth Group Co Ltd, plans to invest $30 million to build a production line for rare-earth oxide extraction in the Western Cape province of South Africa.
"As far as I know, many private investors have shifted their focus to overseas projects," the newspaper quoted an anonymous executive of a Baotou, Inner Mongolia autonomous region-based rare-earth processing company as saying.
Although private investors have access to the rare-earth processing industry, the government has reduced quotas for mining in the sector, which has constrained many private companies' plans, forcing them to seek overseas opportunities, said experts.
In China, local governments own the mining rights for rare-earth deposits, and they are trying to consolidate the highly fragmented sector.
This trend has reduced access for private investors, whose stakes in many local mining companies have been bought by State-owned companies as part of the consolidation moves, according to the newspaper.
In Ganzhou, a city rich in rare-earth resources in Jiangxi province, the local government holds most of the mining licenses through Ganzhou Rare Earth Mineral Industry Co, the country's largest producer of medium and heavy rare-earth minerals. This class of rare earths is used in the aviation industry, among other sectors.
The company has the mining license and other local investors must seek quotas from the company, Wang Ping, the mayor of Ganzhou, told China Daily.
Inner Mongolia Baotou Steel Rare Earth (Group) High-Tech Co, the world's largest rare-earth producer, finished the consolidation of 35 local rare-earth miners in June.
Some local rare-earth miners were closed or acquired by the Baotou group.
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