Rare earth material accounts for 60 percent of MRI equipment.
China Northern Rare Earth (Group) High-Tech Co Ltd, one of the six large rare earth companies in China, is aiming to upgrade its processing technologies for medical applications.
"As China encourages domestic production of high-end medical devices, which use rare earth materials, we see a great potential market in the application of rare earth in medical device production," said Zhang Zhong, chairman and general manager of Northern Rare Earth.
The company, based in Baotou, Inner Mongolia autonomous region, is the only one among the top six rare earth companies in China that has made medical devices a key part of its portfolio.
In August, Northern Rare Earth announced planned investment of 200 million yuan (.8 million) in a rare earth medical industry base, which aims at the high-end application of rare earth and "transforming the company from a raw material supplier into a functional material solution provider and terminal medical device producer".
The main product of the medical device branch is nuclear magnetic resonance imaging or MRI equipment. Permanent magnetic rare earth material accounts for 60 percent of the machine.
The rare earth medical industry base will be built by a company called Xibao Bowei with registered capital of 500 million yuan whose main shareholder (40 percent) is Northern Rare Earth. The base covers an area of 124 square kilometers.
The planned annual production capacity is 300 units. It is one of the largest MRI device production centers in the world.
Production of MRI devices started in 2012. So far, around 200 units have been sold, mostly to medium and small-sized hospitals.
In the future, the base will produce four to five types of large-sized nuclear magnetic medical devices.
The rare earth industry is going through a tough time, with prices of rare earth fluctuating at low level.
In the first half of the year, Northern Rare Earth registered revenue of 2 billion yuan, down 32.5 percent year-on-year.
The company said in the earnings report that the cooling down in the industry would persist for a while.
"It's not sustainable to export rare earth as a raw material. We need to move up the value chain to produce more technology-intensive functional products," said Zhang.
The extensive exploitation of rare earth in the past decade has cut reserves to only 27 million metric tons, down 37 percent from 10 years ago.
Earlier this year, China formulated a plan (2016-20) for the transformation of the rare earth industry, which states that by 2020, key high-end rare earth functional materials will be able to meet more than 80 percent of the demand in information technology, high-end equipment, new energy automobile and national defense industry.
"China's rare earth technologies in the lab are on a par with the international level except in extremely high-level areas such as optical fibers and motors. However, its application lags far behind," said Zhang.
He said that in the near future, MRI devices will be connected to cloud computing so that the test results can be transferred instantaneously to doctors' computers in high-end hospitals to ensure a better diagnosis.
The company is also manufacturing a portable version of the MRI devices that can be carried in cars to provide service in remote regions.