China’s state owned rare-earth companies report falling profits
July 17, 2024
China’s state-owned rare earth companies are facing widespread losses, reports Nikkei Asia, despite government plans to strategically tighten its reins on the resources and supply chain.
Rising Nonferrous Metals, Shanghai, reported that it expects a net loss between $37.3 million and $42.8 million (C¥271-311 million) for the first half of 2024, in contrast to last year’s $14.1 million (C¥102.1 million) net profit. These losses were attributed to a drop in sales prices of rare earths such as dysprosium, terbium and didymium (a mix of neodymium and praseodymium).
China Rare Earth Resources and Technology has also announced an anticipated net loss of between $31.8 million and $43.6 million (C¥231 -251 million) for the first half of the year; for HY1 2023, the company saw a net profit of $23.7 million (C¥171.85 million).
Rising Nonferrous Metals and China Rare Earth Resources and Technology function as part of China Rare Earth Group. This was established in December 2021 through the merger of three state-owned rare-earth mining companies.
Xiamen Tungsten, operating under the Fujian provincial government, has also reported a half year revenue drop of 22% (24% pretax) to $279.7 million (C¥ 2.03 billion) for its rare earth segment. The company as a whole, however, reported a 28% rise in profit to $139.1 million (C¥ 1.01 billion), attributed to its profitable tungsten and molybdenum business. On top of the issues facing the wider rare earth industry, Xiamen Tungsten was also affected by the deconsolidation of two subsidiaries through share sales, thus shrinking its rare earth segment.
Shenghe Resources Holding, backed by the Chinese Finance Ministry, estimates its interim net loss at $6.6 – 9.9 million (C¥ 48-72 million) in the first half, versus a net profit of $11.6 million (C¥ 83.97 million) last year. Whilst it reported increased sales volumes, the price slump negatively impacted its results. It also reported an impact from weakened prices for zirconium and titanium
In May, Shenghe fully acquired Strandline Resources UK. This would give Shenghe 84% equity control over Nyati Mineral Sands in Tanzania, which owns four heavy mineral ore sands projects.
China Northern Rare Earth (Group) High-Tech, the largest rare-earth miner in the country by volume, reported modest profit between $5 – 7.4 million (C¥ 37-54 million), a decline of 95-97% for the year. The company’s board attributed this to the increase in production in combination with imports and recycled materials, a growth in supply which far surpassed demand.
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