China Consolidates Rare Earths Sector, Cuts in Half Approval and Release of Mining Rights

China, in yet another endeavor to loop-thread and consolidate its patchy rare earths mining sector, has decreased in half the approval and release of mining rights it can award to producers and mining firms.

In a report by Bloomberg News, Chen Zhanheng, deputy secretary-general at the Association of China Rare Earth Industry said the world's largest producer and exporter of the precious elements has slashed to 65 nationwide the mining rights for the sector.

In Ganzhou of Jiangxi province, mining rights for rare earths were reduced to 44 from 88, while in the western province of Sichuan it was lowered to seven from 18. On the other hand, Baotou Iron & Steel Group Co. from Inner Mongolia had absorbed its local rivals, according to the information at the Web site of the Ministry of Land and Resources. No details were provided.

"Reducing mining rights helps streamline rare earths development," Mr Chen said, "Still, illegal mining is a bigger issue that the government needs to tackle," he said.

Just recently, China had arrested 19 suspects for alleged illegal mining in Xinfeng in Guangdong province, along with 11 officials punished for lack of supervision.

In the face of China's stricter regulations concerning its rare earths, some of the output from these illegal mines has been smuggled to neighboring countries for processing, Mr Chen said.

The actions of the illegal miners would not flourish if not for the number of consumers wanting to get hold of the vital rare earth elements, especially since global prices have continued to escalate in recent years.

Prices of neodymium oxide, as of July 16, traded at $110 a kilogramme, according to Australian rare earths producer Lynas Corp. The price had jumped tremendously in 2011 to $234.40 a kilogramme from a mere $19.12 a kilogramme in 2009.

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