Rare earth producer JL Mag expects boost from China’s growing NEV sector

JL Mag Rare-Earth supplied carmakers enough magnetic material to produce 800,000 NEVs in the first nine months of last year, up from 450,000 units in 2019

The Shenzhen-listed company plans to raise US$648.8 million from its Hong Kong offering, with the pricing due on Friday

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A rare earth mine in Ganxian county in central China’s Jiangxi province. Photo: Chinatopix via AP

Published: 7:21pm, 3 Jan 2022Updated: 10:01pm, 3 Jan 2022

JL Mag Rare-Earth, a producer of rare earth permanent magnets, expects new energy vehicles (NEVs) to account for most of its sales over the next few years, according to its chairman.

“New energy vehicles is our focus market area now,” Cai Baogui said during a press conference on Monday. “The company’s fastest growing field in the next three years will be NEVs.”

He added that JL MAG was also committed to fighting climate change, and will help in achieving carbon neutrality both in China and around the world.

The Tesla supplier, which plans to list on the Hong Kong stock exchange next week, secured big orders from BYD, SAIC Motor, BAIC Motor, NIO, Li Auto and Xpeng last year, Cai said. The company supplied carmakers enough magnetic material to produce 800,000 NEVs in the first nine months of last year, up from 450,000 cars in 2019.

JL Mag Rare-Earth was the world’s top producer of rare earth permanent magnetic materials in 2020 with a market share of around 14.5 per cent, according to Frost & Sullivan. Rare earth magnetic materials are vital to many industries including smart electronic devices, wind turbines, electric cars and military equipment.

The company plans to raise HK$5.06 billion (US$648.8 million) from its Hong Kong offering, with an overallotment option that could bring in as much as US$745 million. It will market the shares in a price range between HK$33.80 and HK$40.30 per share.