China rare earth comprehensive recycling industry: reform is on the way

Asian Metal: Mr. Xiong, Thank you for agreeing to this interview and your support to Asian Metal. Firstly, could you please give us a brief introduction about the main business of your company?

GM. Xiong: Ganzhou Rare Earth Youli Science and Technology Development Co., Ltd. (“Youli Science and Technology” for short) is located in the National High-tech industrial Development Zone of Ganzhou city and the planning area of “China Rare Metals Valley”. Our company owns a registered capital of 80 million Yuan, with a total investment of 280 million Yuan in the project plan. The company ever named Ganzhou Youli Magnets Co., Ltd, which has been engaged in the rare earth comprehensive recycling of NdFeB magnet waste for more than 10 years. Currently, the Youli Science and Technology has joined in the South Rare Earth Group, one of the six big state-owned enterprises in China, and it is a high-tech company which deals with production and research work of NdFeB magnet waste and ion rare earth concentrate.

Asian Metal: Thanks! Besides, can you introduce yourself basically?

GM. Xiong: I have managed processing with NdFeB magnet waste and production of rare earth metals for more than 10 years, thus I have a certain understanding about the NdFeB magnet waste market. In line with the concept of “People-oriented, integrity management”, and I have a good relationship with dozens of NdFeB magnet companies.

Asian Metal: Mr. Xiong, can you give me a graph about the condition of supply and demand in rare earth the comprehensive recycling industry?

GM. Xiong: China faces with the problem of overcapacity, and I estimate that the ratio between raw materials supply and the capacity is around 1:5.

Asian Metal: So, seen from the view of the NdFeB magnet waste recycling industry, combining with the , what do you think about the Changes on the rare earth recycling industry policies?

GM. Xiong: The government strengthens the regulation of the industry, aiming to meet the needs of the rare earth ore and separation management. Now the government combines management to control, and then eliminates backward production capacity, reaching the goal of “Supply-side Reform” eventually.

Asian Metal: China MIIT held the “Rare Earth Coordination Meeting of Key Enterprises” on 9 Oct in Baotou, and the government claimed to “Accelerate the construction of rare earth tracing system” and “Bring the rare earth recycling outputs into the production statistics”, what does it mean for the industry and would those sentences make senses?

GM. Xiong: The rare earth tracing system will increase the government and enterprises’ management cost, just as the “Rare Earth Special VAT invoice” policy. While, “Bring the rare earth recycling outputs into the production statistics” will be good for the government to manage the rare earth industry macroscopicly and formulate feasible policies.

Asian Metal: There is a phenomenon that the NdFeB waste is in tight supply, what’s the origin of this phenomenon? Have you ever faced with such problem and how you deal with it?

GM. Xiong: From my point of view, the origin of this phenomenon is the overcapacity. Of course, I have confronted with such problem, and the way to solve this problem is to improve the enterprises’ competitiveness, manage sincerely and try best to reduce the production cost. Otherwise, we keep good and stable business relationships with many companies.

Asian Metal: Owing to the low price level of the rare earth products, the market price is closed or even lower than the production cost. However, the recycling plants rely on the government subsidies, now the local governments try to cancel the subsidies, how the recycling plants to deal with it?

GM. Xiong: It is just a short-term activity for the government to subsidy the companies. As a company, we just reinforce the management and technical innovation, and then to improve enterprise competitive ability in the market economy, following the law of the jungle and surviving of the fittest.

Asian Metal: After the mid-November, the rare earth oxide prices moved up slightly, why did the price rises? What do you think about the price trend in future market?

GM. Xiong: The reasons that account for the slight increasing prices are as follows: the rare earth national storage news, more strict regulation on private ore and the environmental protection by the government, the natural price rules and the suppliers’ sales strategies and market psychology. Foreseeing the future market, I am confident as the rare earth is a kind of un-renewable resource, the important strategic material, emerging industry and the indispensable element of national defense science and technology. Actually, the rising prices have no much effect on our production, because we are managing business, not doing speculation.

Asian Metal: What’s the current condition and the development plan of your company, can you introduce to us briefly?

GM. Xiong: Our separation plant is on the stage of filling extraction tank, and we will have new products by the middle or late December. As the experimental base for the National Ionic Rare Earth Engineering Research Center, Youli Science and Technology should be leading the way in the areas of environmental protection and clean production technology. In the aspects of management and benefit, we are aiming to become the model company within the South Rare Earth Group.

Asian Metal: As you ever noted, your company intends to explore the high purity rare earth oxide and the metal production, can you share your thoughts with us?

GM. Xiong: I believe that the directions for rare earth companies are the high purity rare earth oxides in the hydro-metallurgical process and the rare earth function materials in the downstream industry Chain. Youli Science and Technology is going to keep up with research and development of rare earth functional materials, and will engaged in developing the high purity rare earth oxides and the application of new materials.

Asian Metal: Youli Science and Technology always practices its core values of "People-oriented, high-quality and efficient, integrity and win-win" and insists on the mission of "To offer high quality products for customers, to create high quality life for employees", can Mr. Xiong share us your experience in the enterprise management and administration?

GM. Xiong: Two proverbs: "God rewards those who work hard", "Commercial world rewards those who are honest". That is to say, you should be attendant on the management and be sincere to the customer. Employees are the most valuable wealth of enterprise, so just treat workers well and try your best to reward contributory employees. As long as we adhere to the concept of “People-centered, high-quality and efficient, integrity and win-win”, enterprises will continue to grow stronger.

Asian Metal: Thanks for you again to accept our interview. Wish you every success in your business!