http://www.cnbc.com/id/49021198

China cuts rare earths mining permits in consolidation drive

BEIJING, Sept 13 (Reuters) - China has sharply reduced the number of companies licensed to mine rare earths, as part of an effort to consolidate among a few firms deposits of the minerals used for high-tech and military applications.

Rare earths have taken on geopolitical significance as the main producer, China, limited exports and consolidated production over the past few years.

That dual policy is an attempt to raise the international price, lure more rare earths processing industries to China and preserve potentially valuable supplies of rare earths for future military or industrial need.

The number of mining licences has been cut to 67 - most of them going to state-owned mining companies - from 113, according to a list of names released by the Ministry of Land and Resources on Thursday. Only 10 firms are now licensed to explore for rare earths.

The sharpest cuts came in the Ganzhou region of Jiangxi Province, one of the two areas of China with the richest concentration of rare earths deposits. The other region, near Baotou in Inner Mongolia, has already been largely consolidated into the hands of the local state-owned mining company.

Fewer mining licences would not necessarily mean any reduction in total rare earths production in China.

China's export restrictions have drawn international attention to the potential strategic implications of rare earths and raised the price enough to make it profitable to restart shuttered mines in the United States and new mines elsewhere.

U.S. rare earths miner Molycorp gained 5 percent in New York trading on Thursday on the news.

(Reporting by Lucy Hornby; Editing by Alison Williams)

((lucy.hornby@thomsonreuters.com)(+86 10 6627 1269)(Reuters Messaging: lucy.hornby.thomsonreuters.com@reuters.net))

Keywords: CHINA RAREEARTHS/