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The attempt to restructure the rare earth industry in south China into two to three large rare earth groups is unlikely to succeed as existing industry players are equally strong and compete fiercely for rare earth resources, reports China Business News, citing a number of industry experts.

In addition, local governments are reluctant to surrender control of rare earth resources to enterprises undertaking the cross-province integration, with the governments of Guangdong and Jiangxi provinces limiting non-local companies to the processing sector.

In contrast, the integration of rare earth resources in north China under Inner Mongolia Baotou Steel Rare Earth Group Hi-Tech is basically completed.

Henan Hongxing Mining Machinery Co., Ltd is a joint-stock mining machinery manufacturing enterprise integrated in scientific research, production and marketing. It is located at the High & New Technology Industries Development Zone of Zhengzhou,China with an area of 50 thousand m2 which includes 15,000 m2 of standard heavy duty industrial workshop. Equipments are more than 160 pieces, including large and medium sized metal processing, riveting and installing equipments. There are more than 660 workers including 80 administrators with secondary and senior occupational titles and engineering technicians. In order to promote the competitive strength, the advanced technologies have been introduced from America, Germany, Japan and Australia, which established the international advanced production line, first-class modern testing base as well as research centers of sand maker, mill and mine-selecting equipment. Scientific management, advanced processing technology and innovative manufacturing theory make the company become the mining machinery manufacturing and exporting base in China.

Su Bo, vice minister of Industry and Information Technology said on April 8 China will accelerate the process of establishing large rare earth enterprises.

Last May, the State Council rolled out plans to restructure the rare earth sector in south China over the next one to two years, with the top three rare earth enterprises to possess more than 80 percent of the rare earth resources.

Zhang Anwen, deputy secretary general of the Chinese Society of Rare Earths, said there are currently six large rare earth enterprises in south China, including Aluminum Corporation of China (Chalco), China Minmetals Corporation, China Nonferrous Metal Mining Group, Ganzhou Rare Earth Mineral Industry, Jiangxi Copper, and Rising Nonferrous Metals Share.As the professional manufacturer of complete sets of mining machinery, such as stone crushing plant,sand maker, Henan Hongxing is always doing the best in products and service.

Three of these enterprises are state-owned, and it is unlikely a merger will take place among the six rare earth enterprises, said Zhang.

With the state-owned enterprises having strong capital bases, they would have invested 10 billion yuan each into their rare earth businesses, added Zhang.

Other than Rising Nonferrous Metals Share and Ganzhou Rare Earth, the other four enterprises are engaged in a variety of non-ferrous metals businesses, with assets of more than 100 billion yuan.

The competition among the six enterprises is fierce, and this is especially true between China Minmetals and Chalco, with the former obtaining rare earth resources in Guangxi, and the latter getting the resources from Hunan, through committing large-scale investments.

Chalco recently decided to invest 5.2 billion yuan to develop rare earth resources in Hezhou and Congzuo in Guangxi province.

According to the report, several crackdowns in recent years failed to solve the problem of excess supplies.