2011-03-04 15:03

China Minmetals Corp, one of the country's top mining companies has signed a cooperation agreement with the Heyuan municipal government of Guangdong province to develop the city's rare earth resources, according to a statement posted Wednesday on the company's website.

The partnership will cover the complete industry chain, including upstream and downstream development, the Oriental Morning Post reported, citing Wang Jionghui, assistant to the president of Minmetals.

Rare earths in Guangdong province are rich in heavy rare earth elements like terbium and dysprosium, which are highly prized, the newspaper reported, quoting an unnamed industry insider.

The Aluminum Corporation of China, or Chinalco, has been negotiating a potential partnership with Qingyuan, another city in Guangdong province, for rare earth exploitation and development. Minmentals last year said it would invest 1 billion yuan ($148 million) for rare earth processing projects in Ganzhou in Jiangxi province. Industry analysts said the company has ambitious plans in rare earth mining and processing.

China has suspended new mining licenses for rare earth elements, which are used in military weapons, electronics, and automobiles, until June 30. It has reduced production levels for 2010 and cut export quotas by 72 percent for the second half to 7,976 tons to protect the minerals from being over-exploited.

China is planning to establish a rare earth industry association, consisting of approximately 90 Chinese rare earth developers and smelting enterprises, and Minmentals is among the enterprises, previous media reports said.