China cracks down on illegal mining of rare earths

SHAOGUAN, China--Entire mountainsides have been leveled and stripped of vegetation, creating an environmental nightmare.

This is what Chinese authorities are up against as they try to stamp out illegal mining of rare earth elements.

And that is quite apart from the fact that the practice undermines government efforts to control development, production and distribution of these valuable resources.

Nowhere is the problem more pronounced than in Xinfeng county of Shaoguan city in Guangdong province, which is known as the capital of "underground" rare earths.

Rampant mining has laid mountainsides bare, leaving roads covered with dirt flowing down from the eroded slopes.

Local governments have tightened controls on illegal mining since early this year, in line with a central government policy. Informants are paid 3,000 yuan (36,000 yen).

Local authorities had closed 23 illegal mines and 57 processing ponds by April. Thirteen individuals, from five groups, were arrested.

“Rare earths are buried everywhere around here. They are very valuable heavy rare earth elements," said a resident who refused to elaborate for fear of coming to the attention of the authorities.

Rare earths are used in electric vehicles, cellphones and other high-tech products.

China accounts for 97 percent of global production of rare earths. Heavy rare earth elements, such as dysprosium used for magnets for hybrid vehicle motors, are concentrated in southern China, such as Guangdong and Jiangxi provinces.

A wasteland in Xinfeng county where plants have died as a result of illegal mining is being turned into a hog farm.

An official at a livestock breeding company said the government, alarmed by the damage to the environment, provided the land to prevent continued illegal mining.

The official said the company plans to build facilities to raise 10,000 pigs after addressing soil contamination. The pens are scheduled to be completed next year.

The government manages development, production and distribution of natural resources, including rare earths. But some sellers even put up online advertisements. It has been rumored that local officials are involved in illegal mining.

Despite crackdowns, illegal sales continue.

According to Chinese newspapers, a dispute over rare earths at an illegal mine led to a murder involving an iron pipe, a knife and oxalic acid, a toxic substance.

A seller of rare earths said she cannot find buyers now because prices have risen so high, but hopes to resume sales once prices drop.

In Ruyuan, another production center in Shaoguan, a pond is being built in a mountainous area for processing rare earths.

A farmer who lives in the area said rice does not grow like it used to due to years of development that have ruined the mountains, causing water contaminated by heavy metals to flow into paddies.

The government is also restricting exports of rare earths, citing the need to protect the environment and resources.

"Unless the situation is brought under control, overexploitation will destroy ground water and farmland," Zhu Hongren, chief engineer at the Ministry of Industry and Information Technology, said at a news conference on April 25.

Zhu was responding to a question about a complaint filed by Japan, the United States and the EU with the World Trade Organization against China’s rare earth export controls.

Zhu showed three photographs of sites where illegal mining had occurred. Rocks were exposed after landslides, and plants had perished due to soil contamination. It is rare for Chinese officials to show sites of environmental pollution to foreign journalists.

He also said large amounts of toxic gases and effluents are discharged in the production process.

The government has argued that export controls do not violate WTO rules because they are intended to protect the environment and resources, not supply domestic companies on a preferential basis.

The ministry used the news conference to make its case that China is not emphasizing environmental protection as an excuse for export controls, a senior ministry official said.

Until the 1990s, China produced rare earths at low cost and at the expense of the environment. Its export drive forced the United States and other countries to suspend production.

Since 2000, China has supplied rare earths to the domestic industry on a preferential basis as it grew into the “Factory of the World.” Rare earths are strategic resources essential for weapons, such as ballistic missiles and fighter jets, as well as for civilian products.

Zhu also asked foreign companies to establish operations in China and provide technologies for environmental protection, recycling and the development of alternative materials.

“China hopes to cooperate with leading-edge companies from other countries, which have funds and technologies,” Zhu said.

A senior official of a Japanese manufacturer said China is not expected to relax controls over rare earths.

Japanese companies, which are increasing local production in part because of growing consumption in the country, face a dilemma between the need to procure key resources on a stable basis and the risk of technological leakages.