Chinese Tout Next Step Completed in Endeavor to Protect Their Rare Earth Processing Dominance via Inner Mongolia Center

Highlights

• China’s Baotou City opens the world’s largest rare earth processing facility.
• The new project strengthens China’s rare-earth supply chain dominance.
• Facilities can adapt production based on market demand.

The first phase of a green smelting upgrade initiative was operationalized in Baotou City, North China’s Inner Mongolia Autonomous Region. This marks the official launch of the world’s largest base of mission-critical rare earth minerals, operated by China Northern Rare Earth Group High-Tech Co, (opens in a new tab) a subsidiary of Baotou Iron and Steel Group. Published in Global Times, a daily tabloid newspaper online under the auspices of the Chinese Communist Parties flagship newspaper, the People’s Daily. With these sources, Rare Earth Exchanges validates via multiple source points.

According to Chinese news, this project represents the next step for China to reinforce and bolster the nation’s rare-earth industrial and supply chains to “ensure the security of major resources.”

The Company: China Northern Rare Earth Group High-Tech Co, (opens in a new tab) a subsidiary of Baotou Iron and Steel Group resulted from a merger in 2008, when China Northern Rare Earth merged with Baotou Steel Rare Earth. By 2009, the company’s market share reached 90%. In 2010, the company’s performance rose dramatically, increasing by a factor of 12.46 according to Chinese media. In 2014, Baotou Steel Rare Earth established China Northern Rare Earth Group, one of the largest rare-earth corporations in China. It is listed on the Shanghai Stock Exchange. According to Forbes (opens in a new tab), the company generated $780 million on revenue of $5.3 billion. Reuters (opens in a new tab) lists up-to-date information.

The Project: Last March, the company planned an investment of up to 7.8 billion yuan ($1.1 billion) in the construction of this project. Official construction commenced in April 2023, with more than 90 enterprises participating. The project involves developing new capacity to replace outdated production lines, achieving globally leading levels in processing technology, equipment, environmental protection, and production capacity.

What’s the value of built-in flexibility? According to the Chinese press, the company at this massive site can adapt to different product specifications and models based on market demand, allowing for dynamic adjustments to market/supply dynamics.

What does the company leadership have to say? The Global Times quoted Meng Fanying, deputy secretary of the Party committee of Baotou Iron and Steel Group, stating that the completion of this project “holds great significance in consolidating the group’s leading advantage at the forefront of the rare-earth industry chain, enhancing China’s strategic resource security, and strengthening China’s leadership in processing rare-earth resources.”

China seeks to retain its dominance over the rare earth supply chain, while the United States and the West (e.g., Australia, Canada, UK, etc.) seek to disrupt that predominance by investing in prospecting and extracting rare earth minerals and research and development to counter China’s approximately 90% control of separation and processing. This activity and various U.S. policies have been labeled coercion and bullying by China, yet China remains the first mover in securing its monopoly on separation and refining.

While China remains the richest rare-earth resource nation worldwide, rare earth minerals are crucial for manufacturing high-tech products, including smartphones, electric vehicles, wind turbines, and defense systems. As a result, the U.S. and Western interests are moving in to take market share from the Chinese.

Rare Earth Exchanges chronicles these unprecedented times in the rare earth element sector, building a database of projects, players, technologies, and investment opportunities.

Summary: Baotou City (opens in a new tab) in Inner Mongolia, China, is home to one of the world’s largest rare-earth processing and production facilities, often referred to as the “Rare Earth Capital of the World.” The Baotou Rare Earth High-Tech Industrial Development Zone (opens in a new tab) is a major center for mining, refining, and producing REEs, essential for various high-tech applications, including electronics, renewable energy technologies, and defense systems. As Rare Earth Exchanges discusses, the key company involved in processing rare earth elements in Baotou is China Northern Rare Earth Group High-Tech Co., a leading global supplier of rare earth products. Baotou’s facilities refine these materials into products used in a multitude of applications, from magnets for electric vehicles and wind turbines to catalysts and lasers.