Net profit of the world's largest light rare earth supplier rose sharply in 2020, with plans to achieve operating income of 22 billion yuan in 2021

SHANGHAI, Apr 20 (SMM)—According to China Northern Rare Earth (Group) High-Tech (High-Tech), the net profit attributable to shareholders of the world‘s largest supplier of light rare earth products in 2020 totalled 833 million yuan, a year-on-year increase of 35.1%. Operating income stood at 21.25 billion yuan, up 17.43% year-on-year; basic earnings per share were 0.2303 yuan, up 35.1% year-on-year. In 2021, the company plans to achieve operating income of 22 billion yuan with a total profit of 1 billion yuan.

High-Tech is the largest supplier of light rare earth products in China and even around the world, and one of the six largest rare earth groups in domestic rare earth industry. In the first batch of total rare earth production control plan in 2021 issued by MIIT: 84,000 mt for ore products and 81,000 mt for smelting and separated products. High-Tech obtains 44,130 mt of ore products, 38,270 mt of smelting and separated products, both of which account for 52.54% and 47.25% respectively of the national control plan. The company boasts one mining company, 1 beneficiation plant, and 16 smelting and separated plants. Among these 16 smelting and separation enterprises, Baotou Feida Rare Earth was in a state of relocation and suspension, and Inner Mongolia Aerospace Jinxia Chemical has suspended half of its production.

The company has now formed five major functional materials of rare earth sectors: magnetic materials, polishing materials, hydrogen storage materials, luminescent materials and catalytic materials. In terms of raw materials, the main products of High-Tech include lanthanum oxide, cerium oxide, lanthanum cerium carbonate, and neodymium praseodymium oxide; on materials, the company’s main products are magnetic materials, fluorescent materials, hydrogen storage materials, luminescent materials, and catalytic materials; as for applied products, its main products are permanent magnet NMR of rare earth, NiMH motive power batteries, permanent magnet motors and LED lamp beads.

Considering the advantages of Baiyun Obo rare earth resources controlled by the controlling shareholder Baotou  Steel Union, High-Tech purchased rare earth concentrate produced by it and entrusted holding, and shareholding companies, under the guidance of the national rare earth production control plan, to process the rare earth concentrate into mixed rare earth carbonate, and then the company's direct, holding, and shareholding companies separate the mixed rare earth carbonate into single or mixed rare earth salts, rare earth oxides and rare earth metal products. The company purchases and sells the above rare earth smelting and separation products, and asks its subordinate international trade company to develop a diversified trading business with rare earth trading as the core and non-rare earth trading as a supplement to increase revenue. In 2020, the company produced 10,585.13 mt of rare earth oxides, with sales of 21,531.33 mt, and inventories of 90,535.49 mt; produced 17,876.62 mt of rare earth metals, with sales of 17,580.58 mt, and inventories of 1,393.74 mt; produced 73,695.42 mt of rare earth salts, with sales of 64,024.52 mt, and stocks of 35,172.51 mt.

The rare earth market fluctuated greatly in early 2020 amid the worsening Covid-19 pandemic, sluggish downstream demand,. Also, prices of various products fluctuated, and the trend of light and heavy rare earth diverged, and upstream and downstream enterprises faced mounting pressure on production and operation. Production and profitability at enterprises have gradually recovered to the level of the previous years as the pandemic has been effectively controlled since Q2. The price of praseodymium and neodymium oxide, a representative product of light rare earth, has also gradually recovered, reaching a maximum of 445,000 yuan/mt in late November, and praseodymium and neodymium metal also reached a high of 555,000 yuan/mt in the same period.