Faster move to set up huge rare earth groups

China will establish large rare earth companies quickly as the government continues to regulate the industry that had been plagued by smuggling and illegal exploration.

This year, the government will accelerate the formation of such large groups and continue to crack down on unauthorized exploration and mining, the Ministry of Industry and Information Technology said in a statement yesterday as it cited Vice Minister Su Bo's comments made at a conference held by the Association of China Rare Earth Industry.

The consolidation move is likely to benefit industry leaders such as Inner Mongolia Baotou Steel Rare-Earth (Group) Hi-Tech Co and Xiamen Tungsten Xiamen Tungsten Co as they may receive government support in acquiring smaller players, analysts said.

China has been regulating its rare earth industry after years of rampant exploration and mining caused damage to the environment. The country has about 23 percent of the world's rare earth reserves but supplies more than 90 percent of global demand, according a government white book last year.

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