China's tungsten city starts 10,000 T reserve buy

Published: 15 Mar 2009 22:24:27 PST

SHANGHAI, March 16 - Ganzhou, a city in eastern China's Jiangxi Province and the world's largest tungsten making region, is building up its own tungsten and rare earth reserves to support domestic metals firms, the Xinhua news agency said.

The city has raised a special fund totalling about 1.8 billion yuan ($263 million) to purchase 10,000 tonnes of tungsten concentrates and products, and 10,000 tonnes of rare earth raw ores and products, the official news agency said on Sunday, citing a local industry official.

All the 88 rare earth mines and 90 percent of raw earth processors in Ganzhou had halted production as prices had been slumping since last October, Lai Zhaotian, secretary general of the city's rare earth industry association, was quoted as saying.

To help metal firms in a dire situation after commodities prices collapsed, China's State Reserves Bureau has been buying various metals, including copper, aluminium, zinc and nickel.

(For a factbox on the bureau's purchases, please click on [ID:nPEK179560])

The move from the central government was echoed by local authorities including Hunan, Yunnan and Guangxi, which have kicked off similar plans to purchase base metals and minor metals to encourage local major enterprises. ($1=6.838 Yuan)