Minmetals, Chinalco plan RE resource consolidation

China's key rare earths producers Minmetals Rare Earth and Chinalco, and the municipal government of Ganzhou in southeast China's Jiangxi province are planning a strategic restructuring of their rare earth assets.

A specific restructuring plan has not yet been finalised, and needs to be approved by relevant government departments, Minmetals Rare Earth said.

The move follows Beijing's measures to consolidate its rare earth resources.

China began reshuffling its rare earths industry in 2018 by enforcing stricter regulations on mining, production, exports and industry admittance. Six large state-controlled groups were then formed following mergers and acquisitions of smaller producers. China accounts for more than 90pc of global supplies of rare earths.

Minmetals Rare Earth received 1,206t of production quotas for ion-absorption rare earths and 3,395t for smelting and separation products in the first batch of 2021 quota allocations, a 20pc increase each from a year earlier.

Chinalco's light rare earth mining quotas rose to 8,730t from 7,175t in 2020, while its mining quotas for ion-absorption rare earths climbed by 20pc to 1,500t. The company's quotas for smelting and separation products grew by 31pc to 14,327t.

Ganzhou is the largest production hub for medium and heavy rare earths and accounts for 65-70pc of China's total output. Jiangxi province typically allocates almost all of its rare earth quotas to Ganzhou city, which received 8,490t of ion-absorption rare earths last year out of the region's total quota of 8,500t. Jiangxi received 5,100t of ion-absorption rare earth mining quotas in the first half of this year, up by 20pc from a year earlier.

Argus assessed the range for 99.99pc terbium oxide at 8,550-8,650 yuan/kg ($1,325-1,326/kg) ex-works today from Yn8,300-8,400/kg ex-works on 16 September, with export prices rising to $1,320-1,335/kg fob from $1,290-1,305/kg fob over the period. Most suppliers are bullish over the short-term market outlook, considering that continued restrictions on ore feedstock supplies from Myanmar since mid-July will suspend more separation plants next month, especially for medium and heavy rare earth production.