Inner Mongolia Baotou Steel Rare-Earth (Group) Hi-Tech Company announced Tuesday that the company's net profit surged to 1.98 billion yuan ($307.69 million) between January and June, an increase of 45.85 percent year-on-year.
In its half-year report filed to the Shanghai Stock Exchange, the company attributed the profit growth to the strong market demand and the increase of rare-earth prices. The rare earth producer's revenue jumped to 5.98 billion yuan, up 156.8 percent on an annual basis.
"Due to the country's production quota policy on rare earths, the soaring prices of the metals are the main reason for the company's fast profit growth," said Zhang Qi, an analyst with the Haitong Securities Co in Shanghai.
China's total rare-earth export value between January and June surged to $1.54 billion, an increase of 930 percent over the same period of last year, according to the statistics from the Nonferrous Metals Society of China. The company's net profit was 55.77 million yuan in 2009 and the figure climbed to 750.74 million last year.
But Zhang also acknowledged that the high prices of rare-earth metals have already created disputes between China and other countries.
On Monday, Gan Yong, vice president of the China Academy of Engineering, said that some foreign countries have filed complaints about China's rare-earth export restrictions to the World Trade Organization, to force China to relax rare-earth export controls.
"The ideal trade mode could be for China and other countries to establish an exchange system of resources and technologies," Zhang said