Company results: China Minmetals Rare Earth moves into profit in 2016
By Albert Li
Published: Thursday, 08 June 2017
Increase in profits; Turnover down on low prices; RNM reports profit
China Minmetals Rare Earth Company, one of the biggest rare
earth companies in China, moved into a profit in 2016, of
Chinese renminbi (Rmb) 18.59m, from a loss in 2015.
The return to profit was mostly attributed to the
company’s acquisition of Beijing Huatai Xintuo
Geological Survey Technology Co., which added a net profit of
Rmb 114.47m, Minmetals said.
Sales turnover in 2016, however, dropped 2.49% year-on-year
to Rmb 447.74m.
In 2016, rare earth prices remained at low levels putting
pressure on the company.
Some rare earth oxide prices dropped considerably between
the start and the end of the year, and in general, supply
outstripped demand in the rare earth separation industry,
according to Minmetals.
Minmetals received a de-listing risk warning 11 April 2017
because of its losses in 2014 and 2015 ; however, since in 2016
the company turned a profit in 2016 it has now applied to
revoke the warning.
For Q1, Minmetals expects to record a profit because of a
recovery in rare earth prices and an increase in sales and its
gross profit rate, the company said. Furthermore some of its
besides, subsidiary companies have received subsidies from the
government, which has also added more profits.
RNM turns from loss to profit in 2016
Rising Nonferrous Metals Co. (RNM), a subsidiary of
Guangdong Provincial Rare Earth Industrial Group, one
of the biggest six in China, also moved in to profit in
2016.
In results released in May the company recorded a
profit of Rmb 26.32m, up 109.47% from 2015 when it
posted a net loss, on sales turnover that increased
21.43% y-o-y to Rmb 4.16bn,
Rare earth product’s sales turnover
accounted for 48.94% of total turnover while domestic
sales accounted for 92.92% of revenues.
RNM’s rare earth mining output
increased 95.97% y-o-y because its rare earth mine was
allowed to expand boundary; sales volumes also
increased 117.35% y-o-y.
Output and sales of rare earth oxides increased
6.44% and 28.42% y-o-y to 4,068 and 4,500 tonnes
respectively.
In detail, sales of lanthanum oxide, cerium oxide,
europium oxide, yttrium oxide and
praseodymium/neodymium metal increased, while sales of
praseodymium/neodymium oxide, terbium oxide, and
dysprosium oxide dropped due to the company
preparations for the national purchase and storing
inventory policy.
RNM expected that 2017 will be challenging as the
issues of overcapacity, low demand and low prices in
the rare earth sector are likely to continue.
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This article from the June issue of Industrial Minerals
magazine was first published online on 28
April 2017.