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Three New Rare Earth Initiatives In Baotou, Inner Mongolia – Evidence of Greater in Two Rare Earth Basis China

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Highlights

  • Three significant rare earth projects in Baotou, Inner Mongolia.
  • Total investment of over $45 million.
  • Projects include:
    • High-performance NdFeB magnet production
    • Magnet electroplating
    • Permanent magnet motor technologies
  • Part of China’s strategic ‘Two Rare Earth Bases’ initiative to control rare earth element processing, refining, and value-added manufacturing.

The Baotou Rare-earth Hi-Tech Zone (opens in a new tab) in in Baotou, Inner Mongolia, in North China was just recently the location of a signing ceremony for new projects in this bustling hub of the world’s Rare Earth Complex.

The players include Northern Magnet (Inner Mongolia) Co., Ltd. (opens in a new tab), which plans on investing RMB 120 million (USD16.38m) to develop a 3,000tpa high-performance NdFeB magnet operation.  As part of this deal, the company will rent a 6,000-square-meter plant of Inner Mongolia Seagate Environmental Protection Technology Co., Ltd, as well as update an existing high-end magnet production line as part of the effort.

According to the report in Asian Metal (opens in a new tab), the fully operational project will generate RMB690 million (USD94.16m) plus a proportional tax contribution.

But that’s not all.  Tianjin Ruimaige Technology Co., Ltd, a firm that specializes in research and development and NdFeB magnets, will invest RMB 120 million (USD16.38m) for this magnet electroplating production project.

This project goes in phases as well:

PhaseInvestmentDescription
Phase 1 RMB 20million (USD 2.73m) Produce magnet components and modules; Build electroplating line.
Phase 2 RMB 100 million (USD13.65m) “subject to market forces” this phase focuses on production, assembly and sales of complete equipment.*

*they have partnered with Shenyang Zongbei Vacuum Technology Ltd for the implementation in phase 2.

Finally, another RMB100 million (USD13.65) will be infused into Hunan Zhongzi Earth Permanent Magnet Electromechanical Technology Co., Ltd. They will use these funds to build a production line for rare earth permanent magnet internal and external rotor motors, direct drive motor plus permanent magnet motor remanufacturing, capable of producing 5,000 units, reports Asian Metal (opens in a new tab).

This latter initiative at scale-out is expected to generate RMB15 million (USD2.05 m).

All of the rare earth-related projects are linked to China’s Two Rare Earth Bases China initiative. This means the country invests now to not only have a lock-in on processing and refining of rare earth elements but also on value-added production activity.               

Implications

The recent announcement of three significant rare earth initiatives in Baotou, Inner Mongolia, underscores China’s continued dominance in the REE industry and its strategic positioning in the global supply chain.

These projects include investments in high-performance NdFeB magnet production, magnet electroplating lines, and permanent magnet motor technologies, with a total estimated investment exceeding USD 45 million. These developments are part of China’s “Two Rare Earth Bases” strategy, which not only consolidates control over rare earth element processing and refining but also emphasizes value-added manufacturing, such as advanced magnet production and electromechanical technologies.

For the West, these initiatives have profound implications. By deepening its capabilities in high-tech applications of REEs, China strengthens its grip on critical materials essential for industries like defense, renewable energy, and electric vehicles. This of course unless the West makes major investments likely with state backed subsidy for likely a decade.

The integration of upstream (extraction and processing) and downstream (manufacturing) activities within China creates a self-reliant ecosystem that leaves Western industries increasingly vulnerable to supply disruptions. As Baotou doubles down as a hub for innovation and production, Western nations must accelerate efforts to diversify their REE supply chains, invest in domestic production, and develop recycling technologies to reduce dependency. Without strategic countermeasures, the West risks being sidelined in the race for technological and industrial leadership.

Baotou National Rare Earth High and New Technology Industrial Development Zone

Baotou National Rare Earth High and New Technology Industrial Development Zone is the only national hi-tech zone characterized by developing rare earth industry among 108 national hi-tech zones and the only national high-tech zone in Inner Mongolia. There are over 3100 enterprises, including 22 listed enterprises, 8 Global 500 investment enterprises, and 39 foreign-funded enterprises.

There are 52 high-tech enterprises, accounting for 40% of the total number in the Inner Mongolia Autonomous Region. 298 overseas high-level talents are introduced, including four experts of “The Recruitment Program of Global Experts,” which accounts for 60% of that in the Inner Mongolia Autonomous Region, and 13 experts of the “grassland elites” project, which accounts for 50% of that in the Inner Mongolia Autonomous Region.

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