Chinese Company Cleared for Limited Rare Earth Trading

Baotou Steel Rare Earth (Group) Hi Tech, which is China's largest producer of rare earths, has obtained government approval from the region of Inner Mongolia to open a rare earth exchange, according to a state media report on Friday.

Reuters reported that the company, listed in Shanghai and with its mining and processing operations based in Inner Mongolia, will run the exchange together with Inner Mongolia Hi-Tech Holding Co. It cited a Xinhua news agency report that said that the regional government had given the "green light to the establishment of a rare earth exchange in the city of Baotou," giving as its sources city officials and an earlier statement from Baotou Steel Rare Earth (Group) Hi Tech. Xinhua did not say when the bourse would begin operations or whether the central government had also approved the exchange.

China controls approximately 97% of rare earth production and recently slashed both production and export, citing environmental concerns that drive a need to change its production and processes and also concerns over illegal exports. Its tight control over the rare earth supply available to other nations for, among other products, high-tech goods, has worried its customers, who have had to deal with a 62% reduction in available supplies while China tightens the spigot.