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Govt sets rare-earth industry crackdown

(Global Times)
Updated: 2013-08-09 09:05
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Eight authoritative bodies co-launched a campaign Thursday to investigate illegal actions nationwide during the process of rare-earth exploitation, production and circulation, a move that directly propped up shares of rare-earth enterprises.

The campaign, which will be carried out from August 15 to December 15, focuses on six areas such as illegal mining and smuggling, according to a statement released by eight government agencies including the Ministry of Industry and Information Technology (MIIT) and the Ministry of Land and Resources.

Rare earths are a group of 17 metals used in making electronics, alloys, optics products and machinery.

"It is a comprehensive investigation into the rare-earth industry nationwide after the latest investigation in Ganzhou," Chen Zhanheng, deputy secretary--general of the China Rare-Earth Industry Association, told the Global Times Thursday.

In June, China launched a campaign to crack down on illegal mining in -Ganzhou, a rare-earth production base in East China's Jiangxi Province, and ordered most of the local illegal rare-earth mines to halt production, limiting supply which led directly to a price rise.

Chen said the prices of some types of rare earths will climb further, boosted by the new campaign.

Chen also noted that some -China-produced rare-earth metals have been smuggled to other countries like Japan and the US at lower prices, and "this time related departments must strictly prevent the practice."

As the world's biggest exporter of rare earths, China has long focused on crackdowns on illegal mines and -investigations of smuggling cases.

From 2011 to 2012 alone, a total of 14 -illegal mines were shut down and 14 smuggling cases were -investigated, Chen Yanhai, director of the Raw -Materials Department under the MIIT, said at the Baotou China Rare Earth Industry Forum that kicked off Thursday.

Propped up by the campaign, shares of rare-earth enterprises saw a dramatic rise Thursday.

Shares of Shenzhen-listed Galaxy Magnets rose by 4.45 percent hitting 20.4 yuan ($3.33) per share when the stock market closed Thursday.

Shenzhen-listed Advanced Technology & Materials Co witnessed a 4.27 percent growth and Shanghai-listed -Inner Mongolia Baotou Steel Rare-Earth (Group) Hi-Tech Co, the country's largest rare-earth producer, saw a 1.55 percent rise Thursday.

Concerning the enthusiasm in the stock market, Chen warned of the risks of investor speculation, saying that "although the campaign could limit the supply of rare earths via illegal mining, the real demand is not as big as (investors) imagine."

 

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