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China to stop rare earth mining permit issue

BEIJING: China, the world largest producer and exporter of rare earth, will stop issuing new licences for prospecting and mining of the metal until the end of 2005, the official China Daily reported on Monday.

The suspension was aimed at curbing a price war among domestic firms and part of government efforts to restructure the domestic mining industry, the paper quoted a Ministry of Land and Resources official as saying.

"Now that the international market of rare earth is saturated, China should not maintain its rare earth output," it quoted ministry director Liu Zhong as saying.

China is expected to cap rare earth output at 76,000 tonnes in 2003, industrial analysts said. No comparative figures were given.

The paper said China aimed to group key rare earth firms under the Aluminium Corporation of China Ltd (Chalco) and the Baotou Steel & Rare Earth Enterprises Group.

Chalco would take in key rare earth firms in the Guangdong, Hunan, Jiangxi and Jiangsu provinces and Shanghai, while the Baotou firm would integrate some existing operations in the Inner Mongolia, Gansu, Sichuan and Shandong provinces, it said.

The curbs in the rare earth industry are similar to those imposed on the tungsten sector which effectively reduced the number of tungsten mines from 243 in the beginning of 2000 to 123 by the middle of 2002, the paper said.-Reuters