China's Baotou City to Expand Rare Earths Separation Capacity Amid Growing Demand

Baotou, a city in northern China's Inner Mongolia region, is set to significantly increase its capacity for rare earth smelting and separation in response to rising global demand. The city, already the world’s largest supplier of rare earth feedstock, plans to boost its output capacity to 234,000 metric tons per year by the end of 2024. This move will further cement Baotou’s strategic position in the global rare earths industry, which is critical for various high-tech and clean energy applications.

Northern Rare Earth (NRE), one of China’s leading light rare earth producers, is at the forefront of this expansion. The company is upgrading its smelting project at its Baotou Huamei subsidiary, which will increase the site’s rare earth extraction and separation capacity to 106,000 metric tons per year. This upgrade is a key component of Baotou's broader effort to expand its rare earths smelting and separation output.

In addition to this, NRE is expected to complete the construction of a neodymium-iron-boron (NdFeB) scrap recycling facility in Baotou, with a capacity of 4,000 metric tons per year. This will be the city’s first NdFeB recycling production line, further diversifying its rare earths industry.

The value of Baotou's rare earth industry output is projected to rise to 100 billion yuan ($14 billion) by 2024, up from 82.9 billion yuan in 2023. The city's output capacity for rare earth magnetic materials is expected to reach 159,000 metric tons by the end of this year, an increase from 135,000 metric tons in 2023, solidifying Baotou's position as the leading producer of these materials globally.

Baotou is also advancing its development of the rare earth permanent magnet motor industry, with ambitions to become the world’s largest rare earth application base. Wolong Electric Drive, a major manufacturer, is constructing a new motor facility in the city’s rare earths high-tech industrial development zone. The facility, expected to begin operations by the end of 2024, will produce 52,000 units of new energy vehicle motors, 32,000 units of low-speed high-power permanent magnet motors, and 1,300 units of wind turbine motors annually.

Chinese steel producer Baogang has already integrated 1,891 rare earth permanent magnet motors into its operations, with plans to replace over 40,000 traditional motors in the future. These advanced motors offer significant advantages over traditional ones, including a 10-20% reduction in electricity usage, a 50-75% decrease in volume and weight, and a 2-19% improvement in magnet performance.

In May, the government of the Inner Mongolia Autonomous Region announced a plan to accelerate the replacement of traditional motors with rare earth permanent magnet motors. This initiative is part of a broader strategy to reduce energy consumption and enhance efficiency in the industrial sector.