Consolidating policies on Chinese rare earth resources

Abstract

After China lost the WTO case of export management measures on rare earth, tungsten, and molybdenum products, it is imminent to form six large groups to consolidate the country’s rare earth mining and smelting-separation enterprises and to take the comprehensive utilization of rare earth products into a planning management of quantity control. The six groups absolutely control the industry of rare earth mining, smelting, and separation. However, the illegal exploitation, excess production capacity, and smuggling issues still exist; the black industry chain of rare earth impacts the production and price in the market, which damages the environment and industrial policies of the state. After analyzing the rare earth distribution, production, and overseas costs, we found that the low price of Chinese rare earth had great influence on foreign enterprises’ products. The profitable games between Chinese rare earth policies and enterprises interests are the main factors that influence the rare earth market. It is expected that the REE industry will become economically viable only for a few large state-owned enterprises in a rationalization similar to that previously undertaken by China in base metals, steel, and other commodity industries.