China's Inner Mongolia Baotou Steel Rare-earth Group (BSR, 600111.SH), one of the largest producers of rare earths in the world, announced their application to set up a new rare earth group China Northern Rare-earth Group to integrate rare earth resources exploration may be approved by the central government recently.

The application was submitted to the Ministry of Industry and Information Technology in March this year, and got initial approval from the ministry.

But BSR may not only be interested in the rare earth resources in north China, the new group may also participate in the rare earth exploration in south China, and BSR is seeking for foreign cooperation as well.

According to the application, the new group has three steps in the rare earth resource integration.
First,mainly relying on BSR, the new group will complete mergers and acquisitions in the rare earth upstream in Inner Mongolia Autonomous Region with the resource advantage in Bayan Obo.

Second,the new group will cooperate with companies in Gansu, Sichuan, Shandong provinces to merge resources in these districts, where light rare earths resources dominate.

Third, the company may set up platforms to participate in the exploration in south China provinces, for example Jiangxi and Guangdong. According to Zhang Zhong, general manager of BSR, the company now has three rare earth companies in Jiangxi provinces, and one of them, Ganzhou Rare Earth Mineral Industry Co.,Ltd., would dominate in the resource integration in Jiangxi province.

"We are the largest light rare earth provider in the world, and now we are seeking more heavy rare earth resources abroad," Zhang said.

According to local media, heavy rare earth resources have been discovered in South Africa and Malaysia, and some of them are in exploration schemes.

China has taken multi-measures on rare earth exploration since impose rare earth export curbs in June, rare earth mineral occurrences have been integrated to 65 points, and stricter threshold were also imposed on the exploration.