Sungan Materials (CEO Lim Jongchan) announced on the 24th that it has signed a contract to import rare earth metal bars with Guangxi Hezhou Jin Guang Rare-earth Material Ltd in China and has obtained an export permit from the Chinese government.
Guangxi Hezhou Jin Guang Rare-earth Material Ltd, the company with which the contract was signed, is one of the four companies producing rare earth elements for the China Rare Earth Group. It owns rare earth mines and processes 6,000 tons of rare earth ore per month to produce metal bars.
Rare earth elements are essential resources for manufacturing permanent magnets. In the production of permanent magnets, light rare earth elements (LREE) such as neodymium (Nd) and praseodymium (Pr), as well as heavy rare earth elements (HREE) such as dysprosium (Dy) and terbium (Tb), are used as core components.
Permanent magnets made from rare earth elements are indispensable for various advanced industries-including electric vehicles, smartphones, home appliances, wind turbines, and electric motors-because they can maintain a magnetic field for a long period without an external power source.
China accounts for approximately 60% of the world's rare earth production and over 90% of rare earth metal processing and permanent magnet manufacturing in the form of metal bars. Unlike light rare earth elements, which can be mined in countries such as the United States and Australia, most heavy rare earth elements are mined almost exclusively in China.
However, in April, China announced export controls restricting the export of seven types of rare earth elements as a countermeasure against high tariffs imposed by the United States. As a result, exporting these items from China now requires individual approval from the Chinese government.
Against this backdrop, Sungan Materials has been working for several months to import light rare earth elements-neodymium (Nd) and praseodymium (Pr)-as well as heavy rare earth elements-dysprosium (Dy) and terbium (Tb)-from Guangxi Hezhou Jin Guang Rare-earth Material Ltd. At the same time, Guangxi Hezhou Jin Guang Rare-earth Material Ltd has been in close discussions with the Chinese government to obtain export permits for shipments to Sungan Materials.
With this contract, Sungan Materials can now officially import 20 tons of light rare earth elements (neodymium and praseodymium) and 2 tons of heavy rare earth elements (dysprosium and terbium) per month, with export approval from the Chinese government.
The company plans to supply the imported rare earth metal bars to domestic companies that manufacture permanent magnets. It has already concluded discussions with several companies regarding supply prices and volumes.
Sungan Materials also announced that it has reached an agreement with Guangxi Hezhou Jin Guang Rare-earth Material Ltd to receive equipment, facilities, and related technology for processing rare earth metal bars.
Currently, since the Chinese government prohibits the export of rare earth ore, Sungan Materials will initially focus on importing metal bars, conducting quality inspections, and supplying them to customers as part of its distribution business. In the future, the company plans to expand its business by directly processing imported rare earth ore into metal bars and supplying them to customers. In other words, by securing the necessary manufacturing technology to process rare earth elements into metal bars and creating added value, Sungan Materials aims to grow into a competitive player in the rare earth industry.
A company representative stated, "Although our current business is a simple import and distribution structure due to the unstable supply of rare earth elements, there is strong demand from customers, resulting in a relatively high profit margin. Based on the confirmed import volume, we expect to generate significant monthly sales and operating profit." The representative added, "We are also discussing additional volumes with Chinese mining companies, and the scale of our business is expected to expand further. Alongside the rare earth supply business, Sungan Materials plans to expand into rare earth metal processing and permanent magnet manufacturing as new business areas in the mid- to long-term."
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