Chinalco wants to deliver rare earths

In the face of the country’s repeated plans for the future integration of rare earth companies into 2-3 large-scale enterprise groups, Chinalco’s participation in rare earth integration is already in full swing.

Already prepared for the 100 billion yuan of assets of China Aluminum Corporation (hereinafter referred to as China Aluminum), the scale of the rare earth sector is not conspicuous. In the industry, Chinalco is regarded as a latecomer compared with other central enterprises that have entered the rare earth industry.

In fact, China Aluminum Corporation, which has a strong and prosperous relationship, has been operating in the rare earth technology since 10 years ago, and has subsequently entered the southern provinces of Jiangxi, Guangxi, Jiangsu, and Guangdong to break through. Although China Aluminum is not a strong player in the control of rare earth resources, it can even be regarded as a bottleneck. However, "Separate companies acquired in Jiangsu have done a lot of their influence," an industry source thinks. .

Chinalco also summed up the development of its own rare earth plate as "a decade of grinding and a sword."

For the integration of China's rare earth industry, it was proposed as early as the beginning of this century. In 2003, the state proposed to integrate the north and south rare earths. At that time, “Chinalco, as the leader of the country’s integration of Southern Rare Earth, was the representative of the Southern Group, and the north was the Baotou Steel Rare Earth.” Liu Jianjun, Investment Manager of China Rare Earth Co., Ltd. New financial reporter recalled.

But later, due to the change of government and related ministries, the integration was shelved. In the opinion of An Haixuan, a researcher at China Investment Advisor Metallurgical Industry, it is even more important that “the country did not have a clear idea of ​​integration. At the time, basically the large-scale central enterprises were involved in the integration, which would inevitably touch the interests of local governments. This creates some obstacles; and the scattered distribution of rare earth companies has also increased the difficulty of integration."

Although the integration at the national level has been postponed, Chinalco’s work in the field of rare earths has not stopped.

Different from other companies' resources, China National Aluminium's development in the field of rare earths is positioned as “R&D leads the development of the industry, results promote industrial upgrading, and the industry drives technological advances”.

In fact, the rare earth industry is not large. According to Liu Jianjun, before the country issued a variety of rare earth policies in 2011, "the industry's output value in technology is about 30 billion," and Chinalco, with hundreds of billions of assets, is convinced that the development of rare earth industry can not rely on resources alone. “Applications drive the development of the industry, and the development of applications depends on technology.” Therefore, Chinalco has been making efforts in research and development.

In 2005, Chinalco purchased the research rare earth shares and became the largest shareholder of the General Research Institute of Nonferrous Metals, accounting for 39.25% of the shares. The national engineering research center for rare earth materials that has been researched for rare earths is one of the earliest units engaged in the research and development of rare earths in China, and its technology is what CNAL valued. Subsequently, Chinalco and the General Research Institute of Nonferrous Metals signed a "Strategic Cooperation Framework Agreement for Rare Earths Industry" to establish a strategic cooperation that breaks through the core technologies of the rare earth industry.

“Compared to Minmetals, China National, and other central enterprises, Chinalco has a lot of time to engage in Southern Rare Earths at night,” An Haixuan told the New Financial Reporter. This view of him is also recognized by most people in the industry.

In response to this statement, Liu Jianjun admits that "the steps behind Chinalco may be a little slower, but I would like to wait until the technology reserves to a certain extent and then shot."

The results of Chinalco's technical efforts can be seen in its integration of five rare earth separation companies in Jiangsu Province in 2011.

In June 2011, Chinalco and Jiangsu Five Rare Earth Separation Enterprises and a trading company that received directive production plans jointly invested in the establishment of China Aluminum Rare Earth (Jiangsu) Co., Ltd., and became the leading enterprise and integration platform for the rare earth industry in Jiangsu Province. .

It is understood that the rare earth industry in Jiangsu Province was founded in the early 1980s and early 1990s. After 30 years of development, it has formed a good industrial foundation, economic foundation, and a relatively advanced business philosophy. Its process technology is at the leading position in China. . Because it is located in the Taihu Lake basin, environmental protection measures are in place, so the emission index is better than the environmental protection standards issued by the rare earth industry. In terms of product quality, it is also superior to similar products and sold abroad at prices higher than the market.

"After integrating these several companies in Jiangsu, Chinalco has done a good job. Its position in the South China rare earth market is not the same," said industry insiders.

The bottleneck is still that although Chinalco has always focused on the development of high value-added midstream and downstream products, but in the end, it is difficult for a clever woman to be without straw. The technology is even higher. If there is no upstream supply of resources, then the profit margin will be greatly reduced. In the process of development, Chinalco also began to realize this.

"Maybe we want to start from the downstream, but if we don't go upstream, development will be a passive source of water," Liu Jianjun said.

Since May 2011, the Ministry of Land and Resources has stopped the release of all new mining permits, and in September 2012, the Ministry of Land and Resources announced the list of mining rights, mining licenses also dropped 46. Most mining licenses are concentrated in local enterprises, which has become a bottleneck for central enterprises to obtain resources.

The mining license is undoubtedly the trump card to control the resources.

In September 2010, Chinalco and the Jiangxi Provincial State Assets Supervision and Administration Commission signed the "Agreement on Expanding and Expanding Shares of Jiangxi Rare Metal Tungsten Industry Holding Group Co., Ltd." This move was interpreted by the media as the first step of Chinalco's plans to engage in rare earths, but Afterwards it was gone.

In fact, "this is a misunderstanding of understanding," said Liu Jianjun. At the time, this cooperation with Jiangtung Won "was valued for its rare metal tungsten, not rare earth."

In terms of rare earth resources, Chinalco will focus on a substantial amount of resources in Guangxi. “According to our statistics, Guangxi reserves of rare earth mineral resources exceed 1.1 million tons, and resources exceed 6 million tons,” said Liu Jianjun.

According to public information, Guangxi's ionic rare earth reserves are second only to Jiangxi and Guangdong. Another important reason is that although Guangxi is rich in resources, it has not previously been developed on a large scale because of its proximity to Vietnam. "Rare earth mining, separation, smelting, and deep processing have not been scaled up," said industry analysts.

In July 2011, China Aluminum Guangxi Nonferrous Metal Rare Earth Development Co., Ltd. (hereinafter referred to as "JV") jointly established by Chinalco Corporation, Guangxi Non-Ferrous Metals Group Co., Ltd., and Research Institute of Rare Earth New Materials Co., Ltd. was unveiled and established jointly by the three parties. Guangxi rare earth resources. Chinalco took a cash-funded approach and obtained a 50% stake in the joint venture. Guangxi Nonferrous held 40% of the shares, and Rare Earth held a 10% stake.

In 2011, Chinalco also cooperated with Chongzuo, Guangxi. Chongzuo City Development and Reform Commission officials once told the media that “taking into account the financial factors, combined with the fact that Guangxi’s rare earth mineral resources have not been developed on a large scale like those in Jiangxi and Inner Mongolia, experience and technology are relatively lacking. After examining several central enterprises, In the end, the right to integrate and develop Guangxi's rare earth was handed over to Chinalco.”

At present, the only mining license in Guangxi is Chongzuo Rare Earth Co., which originally belonged to Guangxi Nonferrous Metals Group. After the formation of the joint venture company, this mining license already belongs to Chinalco. "At that time, when they discussed cooperation with Guangxi Nonferrous Metals Group, they were taking the mineral rights and equity funds," Liu Jianjun said.

Although there are only mining permits in hand, the amount of mining required is fixed every year. According to statistics, the total amount of rare earth minerals in Guangxi in 2013 was only 1,150 tons.