Xiamen Tungsten to Construct High-Performance Magnet Plant in Inner Mongolia

Xiamen Tungsten, a major state-owned Chinese metals producer, has announced plans to build a high-performance neodymium-iron-boron (NdFeB) magnet manufacturing plant in Baotou, Inner Mongolia. The plant is part of a joint venture with its wholly-owned subsidiary, Fujian Golden Dragon Rare Earth, and will operate under the name Golden Dragon Rare Earth (Baotou). The facility, representing a total investment of 462.22 million yuan (approximately $65 million), is set to begin operations in the first half of 2026 and will have an initial production capacity of 5,000 tons per year.

This strategic move underscores Xiamen Tungsten's commitment to expanding its presence in the high-performance magnet sector, which is crucial for various advanced technologies, including electric vehicles and renewable energy systems. The company's decision to establish the plant in Baotou is likely influenced by the city's abundant rare earth resources, which make it a key hub for China’s rare earth industry.

However, Xiamen Tungsten has faced some financial challenges in its rare earth division this year. In the first half of 2024, the company reported a year-on-year revenue decline of 8.37%, totaling 17.16 billion yuan. Despite this, the company's overall profit rose by 28.29% to 1.01 billion yuan, largely due to cost-cutting measures and efficiency improvements in other sectors.

The rare earths division, in particular, saw revenues fall by 26.66% in the first quarter to 912 million yuan, with profits plummeting by 64.79% to 40 million yuan. This decline is attributed to the company’s consolidation with China Rare Earth Group (CREG), the nation’s largest state-owned rare earths firm. Since late 2023, Xiamen Tungsten’s subsidiaries, Longyan Rare Earth and Golden Dragon Rare Earth, have been integrated into CREG, resulting in Xiamen Tungsten no longer being the controlling shareholder. The consolidation, coupled with falling rare earth prices and intense market competition, has negatively impacted the profitability of Xiamen Tungsten’s rare earth processing operations.

The new venture with Fujian Golden Dragon Rare Earth is seen as an effort to revitalize the company's position in the rare earths market and to leverage the growth potential in high-performance NdFeB magnets. CREG and Xiamen Tungsten have also created another joint venture, China Rare Earth Xiamen Tungsten (Fujian) Rare Earth Mining, where CREG holds a 51% stake, leaving Xiamen Tungsten with 49%.