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China Northern Rare Earth Group High-Tech intends to establish joint ventures with two clients to develop rare earth alloy production facilities, investing a total of 885 million CNY (approximately 128 million USD). The goal is to broaden its lineup of metal alloys and magnets while moving further into downstream manufacturing.
One partnership is with Ningbo Funeng Rare Earth New Material, a company specializing in high-performance rare earth metals and magnet materials. Together, they plan to set up a rare earth metal alloy production line in Baotou, Inner Mongolia, with an annual capacity of 10,000 tons. The project, valued at 290 million CNY (around 42 million USD), is scheduled for completion within a year. Under the agreement, China Northern Rare Earth will hold a 51% stake in the joint venture, with Funeng Rare Earth owning the remaining share. The facility will produce high-purity light rare earth alloys like cerium and cerium-praseodymium-neodymium, as well as functional alloys including dysprosium and terbium, which contain medium and heavy elements.
Expected to generate about 1.3 billion CNY (roughly 189 million USD) in annual revenue, the plant is projected to net around 24.6 million CNY (approximately 3.6 million USD) per year. The investment is anticipated to break even over roughly 12.5 years.
The second joint venture involves Ningbo Shuoteng New Material, a leader in cerium-based magnets. This partnership aims to build a factory in Baotou to produce 10,000 tons of cerium-neodymium-iron-boron permanent magnets annually. The facility will be developed in two phases, each with a 5,000-ton capacity, costing 595 million CNY (about 86 million USD) in total. The construction period will span 20 months for each phase.
Shuoteng will hold a 66% stake in this venture, with China Northern Rare Earth owning the rest. Once operational, the factory is expected to generate an average annual net profit of 73.3 million CNY (around 10.3 million USD) on estimated yearly revenues of 1.4 billion CNY (about 209.6 million USD). The payback period is projected to be just under 10 years.
These new plants are set to expand Northern Rare Earth’s product offerings—adding to its alloy portfolio and strengthening its downstream capabilities. The company aims to position itself as a leading producer of rare earth alloys and permanent magnets, offering a diverse product range rooted in advanced technology. The facilities will also support Baotou’s development into China’s main supply base for rare earth raw materials, fostering a comprehensive, globally competitive rare earth industry from raw materials to advanced applications and recycling.
The company’s stock closed down 2.4%, ending the day at 49.60 CNY (roughly 7.19 USD), while the Shenzhen Component Index increased slightly by 0.2%.
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