In order to crack down on illegal mining, pollution and modernize the country’s mostly low-tech industry China consolidated its rare earth industry under six large organizations in 2014.
By far China and the world’s leading rare earth producer is China North Rare Earth Group Co (formerly Inner Mongolia Baotou Steel Rare-Earth (Group) Hi-Tech Co).
CNRE’s giant mine in Bayan Obo, Inner Mongolia near Baotou City, produces more than the rest of world’s rare earths mines combined and does so as a byproduct of iron ore mining. The 470 million tonne iron deposit was discovered in 1927 and REEs a decade later. According to some estimates Bayan Obo boasts 70% of the world’s proven REE reserves at more than 40 million tonnes.
After consolidating five rare earth separation and refining businesses little over a year ago CNRE has a combined rare earth processing capacity of 73,500 tonnes per year. That compares to 2014 total global mine production of roughly 110,000 tonnes (total illegal mining is put as high as 40,000 tonnes).
The price of iron ore fell back to below $40 a tonne on Thursday, a level last seen in 2007 and down 8% already in 2016 following a near 40% decline last year.
The flood of cheap new supply, mainly from Australia and Brazil have hit smaller producers hard, but domestic Chinese mines which struggle with low grades (only around 20% Fe) and high production costs have been most affected.
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