The rare earths industry in Baotou, the Inner Mongolia autonomous region, is seeking more technology-intensive deep processing to further tap into the international market, said officials in the city.

Wang Zhonghe, Party chief of Baotou, said that the city has set the goal of upgrading its rare earths industry from just exploiting raw materials to developing more comprehensive deep processing technologies with higher added value.

"By the end of 2017, the value of the annual rare earths output in Baotou is expected to reach more than 40 billion yuan ($6 billion). The city will become the biggest rare earths hydrogen storage and technological research and development base," said Wang at the China Baotou International Rare Earths Industry Forum on Monday.

The revenue of the rare earths industry in Baotou was 14.4 billion yuan in 2015, up 12 percent from the same period of the previous year.

China has the largest rare earths reserve and output in the world. Yet its rare earths products have been exported at very low prices.

"Illegal exploitation and export, plus low technological content, are the reasons for the low prices of China's rare earths products," said Wei Renpeng, a researcher at Zero Power Intelligence Group, an industrial research institute based in Shenzhen, Guangdong province.

In 2015, the central government designated Baotou as the pilot city for rare earths reform. The structure of the rare earths industry in Baotou has changed noticeably, said Zhou Changyi, director of the raw materials industry department of the Ministry of Industry and Information Technology.

Zhou said that, compared with 2014, Baotou's current output of rare earth magnets has increased by 1.2 times, 2.3 times for rare earth alloys, 23 percent for rare earth catalysts, and 1.2 times for the number of patents.

A 6.66 billion yuan rare earths industrial transformation fund was founded at the forum. The fund has so far participated in 22 projects, with planned investment of 900 million yuan. The projects include: industrialization of high-performance rare-earth permanent magnets, rare earth hydrogen storage, rare earth polishing powder, rare earths for magnetic resonance imaging device, high-power wind turbine, magnetic refrigeration, batteries for new-energy vehicles, among other sectors.

During the forum, 31 contracts were signed, valued at nearly 10 billion yuan, encompassing electric vehicle high-performance magnets, electrical system control development, abrasive substances for rare earths and nickel-metal hydride batteries.

Tianhe Advanced Tech Magnet Co Ltd, a company specialized in permanent magnet research and development has signed a memorandum with Electron Energy Corp, a rare earth magnet producer in the United States.

Chen Ya, vice-president of Tianhe, said that the company's core competence is its own patents in rare earth processing.

"We mainly export to the European market. This is the first time that we have ventured into North America. EEC will help us in localization and sales channels.

"The world economic slowdown has indeed affected the rare earth industry. Yet in the long run, high-tech products are going to grow fast.

"New-energy vehicles alone will be able to drive up the demand for rare earths," said Chen.

Contact the writers at yangziman@chinadaily.com.cn and yuanhui@chinadaily.com.cn

(China Daily 08/10/2016 page14)