China to complete rare earth industry restructuring by mid-2016

China, the world's largest rare earth producer and exporter, will complete a major restructuring move by mid-2016 to consolidate the industry, an official said Friday.

The work on forming rare earth blocs will be finished by the end of June to restructure the country's rare-earth assets, said Xin Guobin, vice minister of industry and information technology, at a symposium.

China's rare-earth industry is beset by problems including illegal mining, smuggling and a lack of competitiveness due to weak research and development.

In a bid to consolidate and upgrade the industry, the government pledged in 2014 to encourage and support six industry leaders to carry out mergers and acquisitions separately to create large rare-earth producers.

Three firms have already formed rare-earth blocs separately and the other three are still working on it.

Xin said this year will see a reduction of rare-earth smelting capacity, improved output control and increased competitiveness.

By the end of 2020, China should have enhanced its protecting of rare earth resources and have world-leading rare earth-related technology, Xin said.

Rare earth metals are vital for manufacturing high-tech products ranging from smartphones and wind turbines to car batteries and missiles.