Sichuan discovers the world's second-largest light rare earth mineral deposit, industry insiders say it will reshape the resource landscape but is currently limited by short-term regulatory controls | Industry Watch

Financial Associated Press, March 26 (Reporter Wang Bin) Recently, news about the discovery of the world’s second-largest light rare earth mine in Sichuan has attracted market attention. The latest exploration results released by the Ministry of Natural Resources show that the newly added rare earth resource amount (REO) in the Maoniuping mining area of Mianyang City, Sichuan Province is 9.666 million tons, bringing the cumulative confirmed resource amount of rare earths in this mining area to 11.46 million tons.

Image Source: Ministry of Natural Resources Official Website

This data makes it the second-largest operating light rare earth deposit in the world, only after the Baotou Bayan Obo mine in Inner Mongolia, filling the gap of large light rare earth bases in the south. According to publicly available data, the Bayan Obo mine has confirmed rare earth industrial reserves of 44 million tons, accounting for 83.7% of the national total.

It should be noted that the industry generally believes that under the strict total control indicators management system for rare earth mining in the country, the discovery of new reserves does not equate to immediate production output. However, as the integration of the rare earth industry accelerates, those with mines will dominate the future.

The “Global Second” competition still has uncertainties, with a “tripartite” situation emerging domestically

The Maoniuping mining area is not a “sudden emergence” of a new mine but an “old mine” that has undergone years of exploration and has experienced a dramatic increase in reserves.

Public information shows that the mine was discovered and gradually mined in the early 1980s. In 2023, the “Mianyang Maoniuping Rare Earth Mine Resource Reserve Deep Exploration Verification Project,” organized and implemented by Zhongxi (Liangshan) Rare Earth Co., Ltd. (referred to as “Zhongxi Liangshan Company”), was launched. In September of the following year, the project achieved a significant breakthrough in exploration, with an expected new rare earth resource amount of 4.96 million tons (REO), far exceeding expectations.

Zhongxi Liangshan Company is a wholly-owned subsidiary of China Rare Earth Group (referred to as “Zhongxi Group”) and exclusively operates the Maoniuping rare earth mine. In other words, this world-class rare earth mine, which has attracted much attention, is actually a core asset of Zhongxi Group.

Financial Associated Press reporters noted that, according to the Liangshan Prefecture government’s official website, published in June 2025, Liangshan is the world’s second-largest light rare earth resource area, with a total amount of light rare earth oxides of approximately 8 million tons and prospective reserves of over 30 million tons. It is expected that by 2026, the total amount of light rare earth mines in the entire prefecture will exceed 11 million tons (REO).

At the same time, Zhongxi Liangshan Company’s production capacity will strive for 10,000 tons by 2026, aiming to become “the second-largest light rare earth deep processing base in the country.”

Financial Associated Press reporters learned that the Maoniuping mine and the Bayan Obo mine share the same geological origin. According to industry insiders, the Maoniuping mine has a single mineral type, large particle size, and simple composition, resulting in low mining costs and the ability to quickly and economically meet downstream demand for light rare earth elements like praseodymium and neodymium. In contrast, the Bayan Obo mine faces greater difficulties in beneficiation, with a more complex material composition and fine embedded particle size, classifying it as a difficult-to-separate polymetallic ore.

However, the industry generally believes that the differences in resource endowments between the two mines create a technical complementarity: Bayan Obo is suitable for large-scale and comprehensive utilization, serving as the “ballast” of the industry; Maoniuping is more flexible and efficient, acting as the “source of fresh water” for the market.

Before the increase in reserves at Maoniuping, the Weishan mining area in Shandong had long held the position of the world’s second-largest light rare earth mine with a confirmed reserve of 12.75 million tons. It is worth noting that in 2025, the Qishan area of Weishan achieved a significant breakthrough in exploration, discovering a new large rare earth deposit (accompanied by a super-large gallium mine). According to industry standards, a large rare earth deposit is defined as one with a rare earth oxide reserve of more than 1.7 million tons.

Currently, Maoniuping has a cumulative confirmed reserve of 11.46 million tons, while Shandong Weishan has 12.75 million tons. With the final confirmation of the new mine data in Weishan, the “national second” competition between the two locations still has uncertainties. An undeniable fact is that both the Maoniuping mine and the Weishan mining area are now integrated under Zhongxi Group. This means that Zhongxi Group has formed a dual-base layout of “Sichuan + Shandong” in the light rare earth resource sector, combined with the existing advantages of heavy rare earths in the south, constructing a resource map of “north-south coordination, light and heavy complementing each other.”

China Rare Earth Group was established in December 2021, through the restructuring and integration of rare earth assets belonging to China Aluminum Corporation, China Minmetals Corporation, and Ganzhou Rare Earth Group, and introduced two technology-based enterprises, China Steel Research and Yiyang Technology. It is the only central enterprise in China that simultaneously controls both heavy and light rare earth resources. In terms of heavy rare earths, the group has achieved 100% control over the confirmed resource amount of southern ion-type rare earths; for light rare earths, it has formed a light rare earth supply capacity that is on par with northern rare earths by integrating core mining areas such as Sichuan Maoniuping and Shandong Weishan.

For a long time, China’s rare earth resources have shown a “north light, south heavy” characteristic: the north, dominated by the Bayan Obo mine in Inner Mongolia, has a highly concentrated light rare earth resource; the south mainly features ion-type heavy rare earths. The confirmation of the Maoniuping mine with a tens of millions of tons of light rare earths has rewritten this pattern.

Reshaping the resource map, but short-term constraints due to control indicators

Regarding the actual impact of this discovery on the industry and rare earth enterprises, there are differing opinions in the market. Some industry insiders told Financial Associated Press reporters that the discovery of this giant mine in Sichuan greatly enriches the domestic light rare earth resources. However, the current market for light rare earths is not scarce; there is even an oversupply situation, and due to the increased reserves, the prices of praseodymium and neodymium oxides may decline.

Other analysts told Financial Associated Press reporters that the current state has implemented total control management for two types of production activities: rare earth mining and rare earth smelting and separation. The total control indicators (referred to as “rare earth indicators”) have separated the supply amounts of rare earth ores and oxides. Therefore, the increased reserves of rare earth ores have little impact on the market.

According to the “Interim Measures for Total Control Management of Rare Earth Mining and Rare Earth Smelting and Separation,” which was released in 2025, the rare earth indicators are determined and issued by the state to rare earth production enterprises, eliminating the previous intermediate link of decomposition through the rare earth group. No enterprise or individual is allowed to produce without indicators or exceed indicators. Additionally, since last year, rare earth indicators have not been publicly disclosed.

Industry analysts told Financial Associated Press reporters that it is expected that starting in 2026, rare earth indicators may be issued once a year. Industry analysis suggests that the rare earth smelting and separation indicators are expected to exceed 330,000 tons in 2025, with an increase of no less than 10% this year.

Regarding the hot topic of the discovery of the world’s second-largest light rare earth mine in Sichuan, Financial Associated Press reporters consulted relevant listed companies as investors and received feedback closer to the market front.

Relevant persons from China Rare Earth (000831.SZ) responded that the southern ion-type rare earth mines they handle contain a considerable proportion of light rare earth elements in the separated products, not just heavy rare earths. For example, in the distribution of elements from one of the main raw material sources for southern rare earth separation enterprises, the ratio of light rare earth products is generally 55%-60%, while the ratio of heavy rare earth products is 40%-45%.

It is worth mentioning that Zhongxi Group holds both light and heavy rare earth mining indicators, but Northern Rare Earth has only obtained light rare earth mining indicators.

Relevant persons from Northern Rare Earth (600111.SH) stated that the company’s raw materials have long been exclusively supplied by Baogang Co., ensuring stable supply. Even if there are subsequent actions related to the Maoniuping mining area, it will not affect the company’s raw material guarantee. Regarding concerns about “whether increased supply will drive down prices,” they emphasized that rare earth production is strictly controlled by state indicators, “it’s not that whoever discovers a mine can mine freely. Now it’s only a discovery in the exploration stage, whether it can be developed and how to utilize it depends on the state’s policy arrangements. The impact on the industry is limited before actual production capacity is formed.”

Shenghe Resources (600392.SH) also responded that if the mine is extracted in the future, the supply of raw materials in the market will be somewhat sufficient, which may benefit all rare earth enterprises. However, now it is only in the exploration stage; how much can be produced ultimately depends on the indicators given by the state. It needs to be seen whether the state treats it as reserves or increases quotas.

The relevant person also revealed that the company has no mines in the country, with the main mining source being the Pika project in Tanzania, which has not yet been mined and is currently undergoing the approval process for mining technology exports. In terms of light rare earths, the company had previously imported ores from the United States but stopped last year; heavy rare earth mines have always been sourced from the market.

It is clear that under the strict total control indicators management system for rare earth mining in the country, the discovery of new reserves does not equate to immediate production output. Relevant persons from China Rare Earth Group previously told Financial Associated Press reporters that the group focuses on developing heavy rare earth business and international rare earth trade while also continuing to strengthen its light rare earth business. As the integration of the rare earth industry accelerates, those with mines will dominate the future.

(Financial Associated Press Reporter Wang Bin)