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Zhongke Sanhuan takes a stake in Southern rare Earth to set up a joint venture company to produce high-performance rare earth permanent magnet products.
Jul 9,2020 11:21CST
Source:The third Ring Road of Zhongke
The content below was translated by Tencent automatically for reference.

SMM7 March 9: July 6, Zhongke Sanhuan signed the "Agreement on Capital increase and share expansion of China Southern rare Earth Group Co., Ltd." with Ganzhou rare Earth Group Co., Ltd., Jiangxi Copper Group Co., Ltd., and Jiangxi Tungsten Industry holding Group Co., Ltd., Ganzhou rare Earth, Jiangxi Copper Group, and Jiang Tungsten Group agreed to increase the capital of Zhongke Sanhuan by 431393958.40 yuan to southern rare earths. After the capital increase is completed, Zhongke Sanhuan will hold a 5 per cent stake in southern rare earths.

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In order to meet the market demand of high-performance sintered NdFeB products, Zhongke Sanhuan plans to set up a joint venture with Nanfang rare earths to specialize in the production of high-performance sintered NdFeB products. On the same day, Zhongke Sanhuan also signed an agreement with Southern rare Earth to establish and operate Zhongke Sanhuan (Ganzhou) New Materials Co., Ltd. (provisional name) between Beijing Zhongke Sanhuan Hi-Tech Co., Ltd. and China Southern rare Earth Group Co., Ltd., the two sides agreed to jointly initiate the establishment of "Zhongke Sanhuan (Ganzhou) New Materials Co., Ltd. (provisional name, actual industrial and commercial registration shall prevail)". Engaged in high-performance sintered NdFeB product development, production and sales. The total investment scale of the construction project is 500 million yuan, including 330 million yuan invested by the third Ring Road of China Science and Technology and 170 million yuan invested by rare earths in the south. The shareholding structure of Zhongke Sanhuan (Ganzhou) New Materials Co., Ltd. is as follows: Zhongke Sanhuan holds a 66% stake and Nanfang rare earth holds a 34% stake.

After the completion of the new project of Zhongke Sanhuan Ganzhou Base, it can produce 5000.00 tons of sintered NdFeB blanks of various specifications annually, and finally form an annual production capacity of 3200.00 tons of sintered NdFeB magnets. In this project, 32 new buildings of various types (including land-weighing rooms) are built, with a construction area of 74400 square meters, including 10 new production plants with a construction area of 59100 square meters. The construction period of the project is 3 years. After the project reaches production, the annual additional sales income is 1.216 billion yuan, the total annual profit is 139 million yuan, the financial internal rate of return of the project investment is 19.97% (after income tax), the financial net present value is greater than zero, and the investment payback period is 7.05 years (including 3 years of construction period).

NdFeB magnet is the third generation rare earth permanent magnet, which has the advantages of high magnetic energy product, coercivity and high energy density, and has been widely used in modern industry and electronic technology. At present, there are two production processes of NdFeB magnet materials-sintered NdFeB and bonded NdFeB. Bonded NdFeB is magnetic and corrosion resistant in all directions, while sintered NdFeB is generally divided into axial magnetization and radial magnetization, which has a wide range of applications, but it is easy to corrosion and needs surface treatment.

Southern rare Earth is one of the six major rare earth groups approved by the State Council, is the core member of "China rare Gold Valley", is one of the largest medium and heavy rare earth production and management enterprises in China, and has strong strength in the field of rare earth production and trade. The company's main business includes investment in the rare earth industry (not allowed to engage in national financial, securities, futures and financial credit business such as deposit absorption, fund-raising and collection, entrusted loans, etc.), management and authorization within the scope of state-owned assets operation and management of the rare earth industry. (for projects that must be approved according to law, business activities can only be carried out after being approved by the relevant departments. )

Property right situation

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There are four manufacturers of sintered NdFeB permanent magnets under Zhongke Sanhuan-Ningbo Corningda Industrial Co., Ltd., Tianjin Sanhuan Lexi New Materials Co., Ltd., Sanhuan Wakehua (Beijing) Magnetic Devices Co., Ltd. And Zhaoqing Sanhuan Jingyue Magnetic material Co., Ltd., the total design capacity is 18000 tons. For a long time in the future, the supporting role of high-performance rare earth permanent magnet materials in the field of high and new technology, the transformation of traditional industries and low-carbon economic industries will become more and more important. It is becoming the key and foundation to support China's economic transformation and great-leap-forward development.

"Zhongke Sanhuan, a high-performance rare earth permanent magnet product, plans to raise no more than 720 million yuan through a rights issue.

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