Highlights
- Chinese state-backed Xiamen Tungsten is developing a massive rare earth permanent magnet facility in Baotou.
- Targeting 20,000 tonnes annual production by 2027.
- The 2 billion yuan project will contribute an estimated 4 billion yuan in annual revenue.
- Represents a significant technological upgrade in magnet manufacturing.
- The facility strengthens China’s rare earth vertical integration.
- Maintains China’s leadership, producing over 85% of global NdFeB magnet output.
State-backed Xiamen Tungsten’s rare earth permanent magnet materials project in Baotou is entering final commissioning, with full production of 20,000 tonnes per annum (tpa) expected by 2027, according to an update from Asian Metal News dated May 22. The development underscores China’s aggressive scale-up of NdFeB magnet output, reinforcing its dominance across the entire rare earth value chain.
Located in the Baotou Rare Earth Permanent Magnet Motor Industrial Park (opens in a new tab), the multi-phase project spans approximately 200 Mu (~13.3 hectares) and represents a total investment of 2 billion yuan (approximately USD 278 million). Phase I alone, with 460 million yuan (USD 63.85 million) committed, will deliver 5,000 tpa of high-performance rare earth magnets, with commercial output beginning as early as June 2025 cites Asian Metal.
Once operational, the full-scale facility is expected to generate an estimated 4 billion yuan (~USD 555 million) in annual revenue, making it one of the most significant new magnet manufacturing capacities to be brought online in China in recent years. Xiamen Tungsten’s site will feature advanced equipment, including hydrogen decrepitation units, jet mills, sintering furnaces, and automated presses, marking a significant upgrade in magnet-processing technology and scale.
Strategic Context
The Baotou facility is located in Inner Mongolia, the heart of China’s light rare earth supply, particularly for neodymium and praseodymium (NdPr). These elements are critical to NdFeB magnet production, which powers a wide range of applications, including electric vehicle motors, wind turbines, drones, and defense systems. Rare Earth Exchanges (REEx) notes that the investment not only increases volume but also strengthens China’s end-to-end rare earth vertical integration—from mining to value-added manufacturing.
As U.S. and EU governments scramble to localize magnet production, China’s top producers are moving ahead with commercial-scale buildouts and integrating digital-era equipment. Xiamen Tungsten’s Baotou facility joins a growing list of megaprojects consolidating China’s grip over magnet capacity, which already accounts for more than 85% of global NdFeB magnet output.
Market Implications
With neodymium metal prices rebounding in mid-2025 and the global push toward EV electrification accelerating, this new capacity is poised to impact magnet material pricing, supply security, and intellectual property (IP) leverage. Investors should note that Beijing’s rare earth strategy now prioritizes high-end applications and domestic demand, especially in sectors targeted by China’s “dual circulation” industrial plan.
Profile
Xiamen Tungsten Co., Ltd (opens in a new tab). (XTC) is a publicly listed Chinese industrial conglomerate on the Shanghai Stock Exchange (since 2002), with its origins dating back to 1958. Initially known as Xiamen Alumina Plant, the company pivoted into tungsten in the 1980s and formally restructured as XTC in 1997. Today, it stands as one of China’s six major rare earth corporations and a National Key High-Tech Enterprise.
XTC operates a vertically integrated industrial chain across tungsten, rare earths, molybdenum, and new energy materials, alongside a secondary focus in real estate. The company owns over 20 subsidiaries, two national research centers, and multiple post-doctoral stations, reflecting its deep investment in R&D and talent development.
In tungsten, XTC leads globally—its tungsten filaments account for 50% of the global market. At the same time, its smelting, powders, and fine cemented carbide products dominate the Chinese market and carry significant global influence. In rare earths, XTC operates a full-cycle system, from mining to the production of functional materials such as permanent magnets and luminescent powders. Its new energy division includes the production of cathode materials for lithium-ion batteries and anode materials for NiMH batteries.
Strategically, XTC defines its growth model as “two pillars, two wings, and one profit supplement”: tungsten and rare earths as core pillars, new energy and molybdenum as growth wings, and real estate as profit stabilization. Its long-term goal is to be a global leader in advanced materials through continuous technology innovation and management reform.
The company is primarily a state-owned enterprise. While it is a publicly listed company, state-owned entities hold the majority of its shares, and the actual control is held by the State-owned Assets Supervision and Administration Commission of the Fujian Provincial People’s Government.
Rare Earth Exchanges will continue to monitor operational milestones, downstream supply agreements, and potential export policy developments tied to this project.
Source: Asian Metal News, May 22, 2025
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