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September 3, 2009

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Home » Business » Energy

Plan for firm rare earths prices

THE Inner Mongolia Autonomous Region, which has 75 percent of China's rare earths deposits, aims to set up a reserve mechanism to stabilize market prices, a deputy chairman of the region said yesterday.
The region is also leading a consolidation initiative under which Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co, a main producer in the region, will take over small rare earths suppliers, Zhao Shuanglian told a press conference in Beijing.
China itself accounts for more than 90 percent of the world's production of rare earths, making it the only major supplier of the materials used in military and technological applications. China is limiting output and exports to conserve reserves and arrest price declines.
"Rare earths are the most important resource for Inner Mongolia," Zhao said. "We are absolutely not taking a short-term view of just trying to prop up rare earth prices."
He said controlling output and exports could attract more users to set up manufacturing plants in Inner Mongolia.
Rare earth elements are incorporated into many modern technological devices, including superconductors, electronic polishers, refining catalysts and hybrid car components. Rare earth elements or rare earth metals are a collection of 17 chemical elements.
A conglomerate led by Baotou Steel Rare-Earth could create a certain economy of scale in the industry, which would lead to better production control, he said.
Shares of the company surged 7.57 percent to 22.30 yuan (US$3.26) in Shanghai yesterday on Zhao's remark.
Rare earth prices have fallen victim to the global recession which crimped demand. Inner Mongolia produces 50,000 tons of rare earths every year, and exports about 6 percent, Zhao said.
The country's output quota was cut by 8.1 percent this year from a year ago to 119,500 tons, the Ministry of Industry and Information Technology said.


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