Highlights
- Liangshan Rare Earth Group signs strategic agreement to increase rare earth oxide capacity by 30,000 tonnes per year in Mianning County, Sichuan Province.
- Investment of 587 million yuan aims to enhance regional development and reinforce China’s control of rare earth mineral supply chain.
- The project is situated in Panzhihua-Xichang Strategic Resource Zone, a critical region for heavy rare earth elements used in electric vehicles, electronics, and military systems.
In a major move to scale domestic processing power, China’s Liangshan Rare Earth Group has signed a strategic cooperation agreement with Mianning County, a county of Sichuan Province, China, under the administration of the Liangshan Yi Autonomous Prefecture, to expand rare earth oxide (REO) capacity by 30,000 tonnes per annum (tpa). The deal, signed on May 24, was part of ten major investment projects unveiled at the 20th Western China International Fair (WCIF) in Chengdu, representing total investment commitments exceeding 15 billion yuan (~USD 213 million).
The Liangshan-Mianning project alone will see an injection of 587 million yuan (USD 81.5 million) to enhance REO mining and processing capabilities through technical upgrades in Mianning’s core rare earth production area. According to official statements, the investment is intended to enhance regional development efficiency while strengthening China’s control over the upstream and midstream rare earth value chain.
Mianning is situated at the heart of the Panzhihua-Xichang Strategic Resource Zone, one of China’s richest rare earth mineral belts, particularly in heavy rare earth elements (HREEs). The region is crucial to China’s supply security amid tightening global competition over critical minerals used in electric vehicles, wind turbines, electronics, and military systems.
Strategic Implications
For international markets, this deal reaffirms China’s long-term policy of scaling up domestic capacity, securing regional resources, and integrating technical upgrades within strategic zones. With geopolitical tension rising, especially around U.S.–China decoupling and rare earth export controls, China continues to accelerate investment in resource nationalism and supply chain consolidation.
Rare Earth Exchanges (REEx) notes that the timing of this agreement, alongside export license delays that have drawn sharp criticism from the U.S., underscores the strategic intent behind regional upgrades. Beijing is not only defending its dominance but expanding it with capital-backed, state-supported projects in resource-rich provinces.
Note that the Panzhihua-Xichang Strategic Resource Zone, located in southern Sichuan Province, China, is a significant region for vanadium and titanium (V-Ti) resources. It is also known for its iron ore production, ranking third in China after Anshan-Benxi and East Hebei. The region’s development is characterized by a focus on heavy industry, particularly the steel industry, and has been influenced by China’s Third Front construction efforts.
Conclusion
This latest investment signals that China is doubling down on rare earth processing, ensuring that even as foreign governments scramble to build alternative supply chains, China remains several steps ahead in capacity, coordination, and geography.
Source: Asian Metal News, May 29, 2025
For more information on Chinese rare earth element sector see Rare Earth Exchanges and the Forum. (opens in a new tab)
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