In August 2012 Chinese government through the China Rare Earth Industry Association and Ministry of Industry and Information Technology (MIIT) officially designated Baotou as a Rare Earth Capital. Calling cities as capitals of industry is a purely Chinese invention, which may seem pretty awkward in the eyes of most Westerners but which comes along with very concrete, government backed, measures.
According to China’s governmental agencies data, the current rare earth reserves in Baotou City adjacent mines of Bayan Obo accounts for about 87% of China’s, and the Baotou’s export of rare earth products accounts for half of the country.
China’s only national high-tech special economic zone focused on rare earths is also localized in Baotou, which at the same time constitutes the largest production and processing site for these minerals in the country.
Baosteel Group through its Baosteel Rare Earth subsidiary controls the world’s largest rare earth minerals resources. Baotou is also a centre to academic and commercially oriented rare earth focused institutions such as Baotou Rare Earth Institute. It all contributes to the creation of a globally unique, conducive environment for this industry.
Long before targeting rare earths Baotou served as an industrial centre, with a significant portion of its economy coming from industry around metals, mostly steel. The Iron and Steel Base of Bautou was constructed with the help of the Soviet Union to help China in developing its economy, being a part of 156 projects that the Soviets did with China in the 1950s and 1960s.
From 2002, Baotou City started to award rare earth mining rights to Baosteel Group, to centralize the industry. In 2008, eight rare earth production enterprises jointly invested and established Inner Mongolia Baogang Rare Earth International Trade Co., Ltd., which on one hand killed the existence of the free market for rare earths in the province and on the other allowed to avoid oversupply and helped to control the prices.
Currently Baotou City possesses a relatively complete rare earth industrial ecosystem oriented on rare earth mining, smelting, processing, research & development and even a production of rare earths containing end-use products.