Highlights

• China approves Northern Jinlong's $64M, 5,000-t REO/year separation project under strict 'capacity equal-replacement' rules—optimizing product mix without increasing national output.
• The north-south joint venture pairs Inner Mongolia's upstream resources with Fujian's processing expertise.
• The project targets 15 oxide types for EVs, wind, and catalysts by end-2026.
• This integration model strengthens China's midstream control and improves supply reliability.
• May pressure non-Chinese processors on cost and quality—complicating Western diversification efforts.

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Why does China signal tighter rare-earth integration without adding capacity? China’s rare-earth sector just logged another coordinated win according to China Northern Rare Earth Group media entries. Northern Rare Earth (NRE) and Jinlong Rare Earth (a subsidiary of Xiamen Tungsten) have formed Northern Jinlong (opens in a new tab), which received approval to build a 5,000-t REO/year separation project. The move deepens China’s “north–south” cooperation playbook—pairing Inner Mongolia’s upstream strength with Fujian’s processing and market reach—while keeping within national output controls.

What’s new—and why it matters

The Inner Mongolia Department of Industry and Information Technology cleared the ¥470 million (≈$64M) investment for workshops, main plant, and admin facilities. Crucially, the project follows “capacity equal-replacement” rules: no net new smelting/separation capacity is added. Beijing gets optimization and product-mix upgrading without overheating supply—an industrial policy that tells Americans they should note.

Full-spectrum oxides, delivery by end-2026

The new line targets a comprehensive slate: La₂O₃, CeO₂, PrNd oxide, Nd₂O₃, Sm₂O₃, Eu₂O₃, Gd₂O₃, Tb₄O₇, Dy₂O₃, Ho₂O₃, Er₂O₃, Tm₂O₃, Yb₂O₃, Lu₂O₃, and Y₂O₃. Planned completion is by late 2026, positioning Northern Jinlong as a demonstration line with advanced process control and a broad product matrix that can pivot to demand from EV motors, wind, polishing, catalysts, and phosphors.

Strategy signal: provincial SOEs and central players moving in lockstep

This is advantage-complementarity in action: NRE and Jinlong will co-develop technology, co-expand markets, and share resources, pooling brand, talent, and operations to deliver full-element separation. Expect tighter upstream–midstream coordination, faster certification cycles, and more reliable oxide quality windows—hallmarks of China’s state-guided supply discipline.

U.S./allied implications

• Optimization over expansion: Output ceilings remain, but product-mix flexibility improves—helping China meet specialized downstream specs without flooding markets.
• Resilience boost: Cross-regional integration reduces bottlenecks and smooths feedstock-to-oxide flows, reinforcing China’s midstream choke points.
• Margin pressure: Better process yields and coordinated sales could pressure non-Chinese processors on cost, quality spread, and delivery risk.
• Policy takeaway: Capacity replacement + regional teaming is Beijing’s template for control with competitiveness—a tougher target for Western diversification strategies.

Markdown Summary

This translated report details the approval of Northern Jinlong’s 5,000-t REO/year separation project, a ¥470M “capacity-swap” investment by Northern Rare Earth and Jinlong (Xiamen Tungsten). It expands China’s product breadth without raising national capacity, with completion slated for end-2026. For U.S. and allied markets, the north–south integration model sharpens China’s midstream strength, improves quality and reliability, and may squeeze margins for non-Chinese processors—key signals for supply-chain risk planning and procurement strategy. Rare Earth Exchanges (REEx) notes that China already has nearly a monopoly on midstream refining/processing. Of course, the West has emerged awake, with an urgency to change this dynamic.

Disclaimer: This news item originates from media affiliated with a state-owned entity. The information should be independently verified before forming business or investment conclusions.

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