Highlights

• CNREG's Phase II green smelting upgrade in Baotou is accelerating.
• This represents the largest investment and most advanced technology upgrade in China's rare-earth industry history.
• Key extraction and separation workshop frames are already completed.
• The expansion builds on Phase I operational feedback with refined designs, improved infrastructure, and enhanced capacity.
• Focuses include transformation extraction, mid-/heavy rare-earth extraction, and post-treatment facilities.
• The target is for the building enclosure to be completed by year-end.
• This strategic upgrade strengthens China's downstream rare-earth processing dominance, holding approximately 90% of the global share.
• The upgrade could widen the technological and capacity gap as Western nations attempt to diversify critical mineral supply chains for EVs, renewables, and defense.

---

The Phase II construction of the “green smelting upgrade and transformation project” at China Northern Rare Earth Group High‑Tech Co., Ltd. (CNREG) in Baotou is now moving at full speed. On-site, work is intense — over 300 construction workers and numerous heavy vehicles are operating concurrently. At the heart of the site, the steel-framed structures for the key workshops — the “Transformation Extraction B” hall and the Middle/Heavy Rare-Earth Extraction hall — have already taken shape, signaling that the largest-ever investment and most advanced technology upgrade in China’s rare-earth industry history is accelerating.

Status of the Expansion

Phase I of this green smelting upgrade has already been in production for almost a year. The Phase II effort, launched in July this year, covers core facilities including the Transformation Extraction B workshop, the mid-/heavy rare-earth extraction workshop, the SEG (separation) extraction-separation workshop and the Post-treatment B workshop. These new facilities will further boost CNREG’s smelting and separation capacity of rare earths.

According to Li Zhihong, regional technical director at the Engineering & Construction Department, the Phase II build builds on and upgrades thePhase I experience — both in terms of project management andprocessing technology. The construction team is using the same mature systems for work-planning, quality control and environmental/safety oversight from Phase I, but has taken stronger steps such as strict access controls and closer client-side oversight to resolve coordination challenges among multiple contractors. To control cost and ensure build quality, the project’s command center is staffed by the original experienced team. Drawing on operational feedback from Phase I’s run-time, the team has refined the structural design of the main factory buildings, arranged equipment layouts more efficiently and refined process details to achieve leaner and more precise performance.

Compared with the early layout of Phase I, the Phase II site boasts wider, more level roads and clearly separated construction and production zones — which not only elevate the standards of the construction environment and safety, but also lay a strong foundation forwinter‐time work. At present the project office, along with allexecutives and employees, are racing to complete the main buildings’ enclosure before year-end, thereby paving the way for subsequent equipment installation and driving the project toward early commissioning and operationalization.

Key Updates/Business Relevance:

• The story signals a large‐scale upgrade at CNREG — one of China’s dominant rare earth producers, headquartered in Baotou, Inner Mongolia.
• This Phase II is positioned as even more ambitious than the first phase. The workshop names and building frames suggest that China is investing heavily in boosting smelting, extraction, separation andpost-treatment of rare earths — key steps in the value chainbeyond raw mining.
• For a business audience, it means CNREG is gearing up to increase output and upgrade technology, potentially lowering costs, improving environmental performance and boosting downstream supply of rare‐earth oxides and metals.
• From a supply-chain perspective the timing is important: with global demand for rare-earth‐based components (EV motors, wind turbines, defense systems) growing, China’s leading firms doubling down on capacity and green smelting upgrades means the West and U.S. may face still tougher competition for supply or price leverage.
• The emphasis on “green” and “smart” upgrades (while still not heavily detailed in this piece) signals China’s intent to consolidate dominance not just in quantity but in advanced,lower-impact processing — potentially raising the bar for globalcompetitors.

Implications / Breakthroughs with Significance for the West/U.S.

• By accelerating the upgrade of its smelting and separation infrastructure, CNREG is likely tightening China’s grip on the downstream processing of rare-earth elements — not just mining. Since China already processes close to ~90 % of global refined rare earths, the U.S. and allies remain structurally dependent.
• The enhanced capacity in China could drive supply resilience for Chinese end-users, reducing their vulnerability to trade/technology disruption. For Western business and policy stakeholders this means the window for catching up or building alternative supply chains may shrink.
• The “green” orientation may set a new benchmark for processing: if China can produce rare-earth outputs with lower environmental cost, Chinese suppliers may win favor among global OEMs seeking sustainable supply chains — raising pressure on Western projects to match both quality and sustainability credentials.
• For the U.S., which is already pursuing strategies to diversify away from China in critical minerals, this move is a reminder that China may widen its lead not just in scale but in vertically-integrated, green, digitized production. That may elevate strategic urgency and cost for U.S./allied refiners.

Summary

China’s Baotou-based rare-earth powerhouse CNREG is accelerating the Phase II of its green smelting upgrade — described as the largest investment in China’s rare-earth sector to date. With steel frames already in place for core extraction and separation workshops, the facility is slated to boost production capacity, improve technological sophistication and raise environmental performance. Drawing on lessons from the first phase, the build is using refined process designs, enhanced road and zone infrastructure and tighter contractor coordination. For global business watchers, this signals that China is pressing its advantage down the rare-earth value chain at a critical moment for EVs, renewable energy and defense-component linkages. The increased output and upgraded tech may further strengthen China’s strategic position in supplies that the U.S. and West have been working to diversify away from.

Disclaimer: This news item originates from Chinese state‐owned-entity media and should be verified by an independent source.

©!-- /wp:paragraph -->