Published time：2012-8-27 17:05:00 Read：Number
China, Citing Errors, Vows to Overhaul Rare Earth Industry By KEITH BRADSHER Published: June 20, 2012
HONG KONG — China’s cabinet issued on Wednesday its first white paper on rare earth industry policies, acknowledging that poorly regulated mining of rare earth metals had caused widespread environmental damage and promising an extensive cleanup and a crackdown on illegal mines. The document warned that inefficient mining and refining practices had squandered scarce mineral reserves and produced extensive emissions of radioactive residues, heavy metals and other contaminants. “Excessive rare earth mining has resulted in landslides, clogged rivers, environmental pollution emergencies and even major accidents and disasters, causing great damage to people’s safety and health and the ecological environment,” the white paper said. China produces more than 90 percent of the world’s rare earth metals, which are essential to high-technology applications from smartphones to smart bombs and are also used in oil refining, glass polishing, batteries, electric car motors and many other industrial applications. The document comes after the United States, the European Union and Japan jointly filed a case in March at the World Trade Organization that challenged China’s restrictions on rare earth exports, which were imposed in 2006 and have been repeatedly tightened since then. The W.T.O. case argues that the export quotas and tariffs violate free trade rules by putting pressure on companies to move their factories to China if they want to tap China’s vast supply of rare earths. Chinese officials have previously signaled that their defense in that case will be to use a provision of W.T.O. rules that allows export restrictions for environmental protection and the conservation of scarce natural resources. But they were quick to deny Wednesday that this had been their motive for releasing the white paper. “The protection of the environment is never a pretext for gaining advantage or increasing economic returns,” Su Bo, a deputy minister of industry, said at a news conference in Beijing. The white paper says China has only 23 percent of the world’s rare earth reserves and has already depleted the most accessible reserves. But the United States Geological Survey a year ago raised its estimate of Chinese rare earth reserves, to half the world’s supply, compared with a third of the world’s reserves. Various local and provincial governments across China have announced numerous discoveries of large rare earth deposits in recent years, yet Chinese officials have scarcely changed official estimates for nationwide reserves, rare earth industry experts point out. The Chinese government has already been quietly closing rare earth refineries for months at a time in the last year and forcing them to install costly environmental controls. Together with a plunge in world prices for rare earths in the last year as a speculative surge has subsided, the environmental rules have hurt profit margins for exporters. Dudley Kingsnorth, an adjunct professor specializing in rare earths at Curtin University in Perth, Australia, said that the white paper, “is really only a more formal statement of their current actions to place more effective control on the industry to reduce the impact on the environment while ensuring they receive a better return on their rich endowment of rare earths.” A version of this article appeared in print on June 21, 2012, on page B2 of the New York edition with the headline: China, Citing Errors, Vows to Overhaul Rare Earth Industry.