Highlights

• Tianhe plans significant investment in rare earth permanent magnet technologies, aligned with China's strategic export control policies.
• The company produces NdFeB (Neodymium Iron Boron) and SmCo (Samarium Cobalt) magnets for critical sectors like electric vehicles, wind turbines, robotics, and defense systems.
• The investment signals China's intent to cement control of the magnet midstream and potentially leverage global supply dynamics.

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Baotou Tianhe Magnetics Technology Co., Ltd. (opens in a new tab) (Shanghai: 603072)—one of China’s leading producers of rare earth permanent magnets—has announced plans to invest heavily in new rare earth magnet and equipment projects, according to a Reuters dispatch (Oct 9, 2025). The stock jumped 5.2% to ¥49.66 (~US $6.98), reflecting investor confidence amid Beijing’s tightening export regime and accelerated state-backed consolidation across the downstream magnet industry.

A New Layer of Vertical Control

The investment plan follows closely on the heels of China’s Announcement No. 61, which expanded export controls on rare earths and permanent magnets. The new policy effectively curbs the outflow of Chinese-origin magnet technologies—positioning Tianhe’s investment as a strategic, state-aligned expansion that fortifies China’s grip from ore to finished magnet.

Tianhe currently produces NdFeB (neodymium-iron-boron) and SmCo (samarium-cobalt) magnets for electric vehicles, wind turbines, robotics, and defense systems. Headquartered in Inner Mongolia, the world’s most concentrated rare earth production hub, the company’s planned expansion will deepen domestic supply resilience and mitigate export disruptions triggered by new trade restrictions.

Yet several crucial details remain unclear:

• Project scale and timeline: No investment value or commissioning schedule disclosed.
• Funding sources: Is this part of provincial industrial stimulus, or internally financed?
• Market allocation: Will added output serve domestic state procurement, or global export substitution?

Each answer will shape whether Tianhe’s expansion boosts domestic oversupply—or strategically tightens supply to sustain global magnet price leverage.

InvestorView: Fundamentals Meet Geopolitics

With a market capitalization near ¥48 billion (~US $6.74 billion) and solid mid-year earnings (June 2025), Tianhe appears financially sound. The technical breakout above ¥49 signals bullish momentum, driven largely by policy-induced optimism. Still, investors should note that Tianhe’s growth is policy-driven rather than purely market-driven. Beijing’s rare earth consolidation channels state financing and export preference toward selected firms, effectively lowering downside risk while obscuring commercial independence.

The Global Implication: The Supply Gap Widens

For the United States and allied economies, Tianhe’s move underscores a widening scale gap. While USA Rare Earth and Noveon Magnetics edge toward pilot-scale magnet production, China is expanding at full industrial pace.

Key takeaway

Beijing is not merely reacting to Western trade policy—it is seeking to cement control of the magnet midstream, ensuring that each future supply shock lands hardest on foreign markets.

Sources: Reuters via MarketScreener, Oct 9 2025; Baotou Tianhe Magnetics Technology Co., Ltd. filings; Rare Earth Exchanges analysis.

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