China Dominates Rare Earth Resources
The world’s rare earth resources are mainly held by China, Australia, Russia, the U.S., Brazil, Canada and India, according to a new report from CCID Consulting. In recent years, large rare earth deposits were also found in Vietnam.
In 2011, China’s rare earth reserve and output stood at 36 million and 120,000 tons, respectively, accounting for 36% and 97% of the world’s total. In contrast, the U.S., Russia, Australia and India held only 13 million, 19 million, 5.4 million and 3.1 million tons, respectively, making up only 13%, 19%, 5.4% and 3% of the world’s total. In addition, the rare earth output of India was 2,700 tons 2% of the world’s total), while the rest of the countries yielded none.
China is substantially lowering its limit of rare earth mining, with a sharp decrease of 25% in 2010 from the previous year. In 2011, the limit stood at 93,800 tons, growing by 5% year-on-year from 89,200 tons in 2010, among which light rare earth and medium-heavy rare earth stood at 80,400 tons and 13,400 tons, respectively. Therefore, CCID Consulting holds that China’s rare earth mining limit will not experience a significant decrease in the next few years.
Strategic investment is a major channel of equity financing in China’s rare earth industry. From 2010 to 2011, 11 strategic financing cases were disclosed, accounting for 73.33% of the total financing cases; nine of them disclosed a total financing amount of RMB 793 million (~ $125 million), making up 50.28% of the total disclosed financing amount.
From 2010 to 2011, 15 equity financing cases were reported by rare earth enterprises in China, mainly located in Jiangxi, Fujian, Guangdong, Guangxi, and other southern areas where rare earths abound. The named four provinces and autonomous regions held 11 of the financing cases, accounting for 73.33% of the total.
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