On June 20, 2012, the Information Office of the State Council of China published a white paper: Situation and Policies of China’s Rare Earths, giving a background of China’s rare earth industry and its intention of protecting the rare earth resources in China and promoting environmentally sustainable development.
China’s rare earth reserves account for approximately 23% of the world’s total; however, 90% of the rare earths in the world market are supplied by China, which has become an increasingly serious environmental concern. Moreover, the current rare earth prices have deviated from a true reflection of value, i.e., the scarcity is not fully captured. The phrase “the loss outweighs the gain” can summarize the exploitation of Chinese rare earths in recent years.
In Ganzhou, where heavy rare earth resources are abundant and in-situ leaching technology is adopted, 7 tons of ammonium sulfate has to be injected into underground in order to exploit 1 ton of rare earth oxide. In this case, a large amount of ammonium sulfate is detained underground, and the groundwater resources will be seriously polluted when it rains. The same type of problem exists for light rare earth resources in north China where fluoride toxic exhaust and ammonia nitrogen waste water are discharged during the smelting and separation of rare earth materials.
More worrisome is that China’s rare earth resources are being depleted while significant environmental problems are rising. According to the white paper, after more than 50 years of aggressive exploitation, China’s rare earth resources have kept declining, and the remaining years of guaranteed supply have been shortened. The decline of rare earth resources in major mining areas is accelerating as most of the original resources are depleted.
In Baotou, only one-third of the original volume of rare earth resources is available in the main mining areas, and the reserve-extraction ratio of ion-absorption rare earth mines in China’s southern provinces has declined from 50 two decades ago to the present 15. Most of the southern ion-absorption rare earth deposit mines are located in remote mountainous areas. There are so many mines scattered over a large area that it is difficult and costly to monitor their operation. As a result, illegal mining has severely impacted local resources, and mines that are richer in reserves and more easily accessible are inefficiently exploited, resulting in a low recovery ratio. Less that 50 percent of such resources are recovered in ion-absorption rare earth mines in Southern China, and only ten percent of the Baotou reserves with dressed ore are selected and utilized.
Furthermore, excessive mining in some areas has caused landslides, blocked rivers, and has led to environmental pollution emergencies, severe accidents and disasters. These create significant public health and ecological hazards. At the same time, environmental restoration and improvement has also burdened some rare earth production areas.
Rare earth has been long known as the “vitamin for the industry” and the “golden industry” due to scarcity. However, over quite a long period, the “golden industry” from China has been sold at a comparatively low price. For example, from 2000 to 2010, the price of rare earth products rose 2.5 fold, while that of gold, copper, and iron ore increased 4.4, 4.1, and 4.8 fold during the same period, respectively.
According to the white paper, in 2011, China planned to export 30,200 tons of rare earth products, of which only 61% of that, or 18,600 tons, was done. Declining demand due to the global economic recession is the main cause of this shortfall; however a large price hike also contributed, and some countries are endeavoring to exploit new rare earth resources and search for substitute products in reaction to the price increases.
In view of these problems, according to the white paper, China is going to implement stricter ecological standards and protective mining policies and will try to establish standardized and orderly procedures for resource exploitation, smelting and separating, and market circulation. Furthermore, China will also complete policies and laws related to rare earth materials and try to build a rare earth trade platform. Regarding rare earth export concerns, China will continue to supply the international market while reinforcing measures for resource and environmental protection. At the same time, China hopes that other countries and regions with abundant rare earth reserves can better share the responsibility for their global supply. China will keep encouraging foreign investment in the rare earth industry. To date, enterprises from the United States, Germany, France, Canada, and Japan have invested in this field in China, and 38 sole-proprietorship foreign-venture and joint-venture enterprises have been founded. China has been actively creating a fair and open environment for foreign investment, encouraging foreign investment in environment restoration, waste product recycling, and high-end application development and equipment manufacturing in the rare earth industry. China is going to keep improving its ability and level of environment and resource protection during the development of the rare earth industry.