(Yicai Global) March 15 -- China Northern Rare Earth Group High-Tech said it plans this year to purchase as much as CNY15 billion (USD2.2 billion) or rare-earth ore concentrates from Inner Mongolia Baotou Steel Union, which has been supplying it since 2017.

The Baotou-based producer of light rare-earth elements intends to buy 320,000 tons of ore concentrates from Baotou Steel Union in 2023, it announced yesterday. The two agreed on a price of CNY35,313 (USD5,139) a ton for the three months ending March 31.

Northern Rare Earth said it buys from Baotou Steel Union to meet its raw material needs for production and operation, to consolidate and raise its rare-earth resources, and to ensure raw material support for its high-quality development, which is in line with the overall interests of the company and shareholders.

The pair have a common controlling shareholder, Baogang Group.

In a separate statement issued on the same day, Northern Rare Earth said it will invest up to CNY7.8 billion through a unit, Baotou Huamei Rare-Earth Hi-Tech, to build a smelting subsidiary and green smelting upgrading project. 

The project will improve the firm's profitability, core competitiveness, resource control, and supply capacity of high-quality, green, and low-carbon products, it added.

Shares of Northern Rare Earth [SHA: 600111] ended little changed today at CNY26.13 (USD3.71) apiece, while Baotou Steel Union's stock [SHA: 600010] rose 1.6 percent to CNY1.97 (29 US cents).

Editor: Martin Kadiev