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.

 

This article from the June issue of Industrial Minerals magazine was first published online on 28 April 2017.