(Yicai Global) Nov. 28 -- Hebei Sitong New Metal Material plans to invest a total of CNY540 million (USD76.8 million) building a new factory to make commercial vehicle wheels and aluminum alloys containing rare earths in China's Inner Mongolia Autonomous Region to boost its aluminum wheel output.

The plant will be located in Baotou city in Inner Mongolia, which is rich in rare earth deposits and electric power resources, the Baoding, Hebei province-based company said in a statement yesterday.

Aluminum alloy containing rare earth has the best resistance to plastic deformation and damage under the combined action of high temperature and load.

The firm will spend CNY200 million on a new 50,000-ton production line for aluminum alloys containing rare earth, and CNY295 million on an assembly line for commercial vehicle wheels made of the alloys, with an annual capacity of 600,000 units. It will invest another CNY45 million to boost annual output of aluminum alloy passenger car wheels from 5.4 million to 6 million units.

The first phase of the rare earth aluminum alloy project is slated to produce 20,000 tons a year and will be completed and put into operation in the second half of 2021. The second phase will have an annual capacity of 10,000 tons and be completed in the first half of 2022. The other capacity expansion projects will all be finished and start production by the end of 2023.

The rare-earth aluminum alloy commercial vehicle wheel project will also be carried out in two phases, and achieve full capacity by the end of 2023.

Hebei Sitong also plans to set up a high-standard comprehensive research and development center on aluminum alloys containing rare earth in the industrial park where the project is located, the statement added.