Abstract: “China-Rare Earth”accelerated the integration of rare earth industry resources.At present, the Chinese rare earth industry turned into “5+1”large group enterprises, which in theory are conducive to the industry’s ability to implement the industrial policy of sustainable development of rare earth strategic resources.Meanwhile, the rare earth front-end industry market is highly concentrated, but not sufficiently competitive.Insufficient R&D investment and negative externalities of leading companies are prominent, and in turn, production cost efficiency has not been improved.The rare earth processing and raw material production are difficult to realize the reasonable value of key strategic resources.The deviation of price and value is serious.This research takes the rare earth front-end industry listed companies as the research object and uses the three-stage DEA model to analyze the production efficiency of the front-end industry.The conclusion points out that the production efficiency of the rare earth front-end industry is easily affected by the external conditions, the industrial production efficiency is low and overestimated under the influence of local government preferential policies, and it negatively correlated with the production efficiency.After forming the “5+1”groups, the scale efficiency is diminishing, and the front-end industry is insufficient to take its social responsibilities.Central government promotes the flow of innovative industrial elements to the up-end of the industrial chain, which will help build the connection of the low-end and up-end of the industrial value chain and realize the green, healthy and high-value development of the entire industry.