Bane from Exporting Rare Earth
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The Party secretary of Ganzhou, Jiangxi, told me that it cost at least 38 billion yuan to deal with the pollution caused by mining rare earth in Ganzhou.”
When he was present in the foundation ceremony of the Chinese Association of Rare Earth, Vice Minister of Industry and Information Technology Su Bo said. “I don’t know whether Ganzhou earned more than this from mining rare earth in these years.”
In truth, the 38-billion-yuan cost for dealing with the pollution has already outnumbered the profits accumulated from rare earth industry in Jiangxi Province. According to the report from Jiangxi government, the profit of rare earth industry in this province only amounted to 6.5 billion yuan in 2011. This figure was even fourfold as high as the one in 2010.
Not only Ganzhou, but also the whole country of China, is haunted by the serious pollution and high cost of dealing with pollution in the rare earth industry.
“The recent survey into the rare earth industry revealed some problems that got on my nerves. The green mountains were gone, replaced by bald hills covered with mining holes.” Su Bo said. “After years’ adjustment, the illegal exploitation and mining of rare earth are initially changed. But more changes are needed since the illegal exploitation and mining still exist in many places.”
Ganzhou is the first city that discloses the cost of dealing with pollution caused by rare earth. Though it is a common idea that rare earth exploitation is a serious polluter for the environment, no authority is available for how to deal with the pollution and how much capital does this need.
China’s reserves of rare earth only account for one third of the reserves in the whole world, but it provides for 97% of rare earth resources used in the world. Other countries, like the United States, have a great amount of rare earth reserves too and were once main exporters of rare earth. But in recent years they do not export, or even exploit their own rare earth resources.
At the same time, foreign countries always criticized China for limiting the exportation of rare earth. Against that background, publishing the environment cost of rare earth industry is a good option.
“Poisonous” Links in Rare Earth Industry
Before 2010, the rare earth was sold at a low price, causing the whole rare earth industry in China to struggle with low or even no profits. Most of rare earth enterprises in China did not see profits until the price of rare earth had a drastic increase in 2010.
The financial data from Jiangxi Provincial Commission of Industry and Information Technology shows that there were 51 rare earth enterprises in Jiangxi by the end of 2011 and their rare earth business contributed the income of 32.92 billion yuan, which was 139.8% higher than the year of 2010. Their profits amounted to 6.5 billion yuan, up 493.5% from a year before.
But the cost was still huge.
When journalists made a survey about the excessive and illegal mining of rare earth in Jiangxi, they found that no grass or any other animated things could be found around a private rare earth mine which was just closed because of the chemical pollution.
As introduced by Su Bo, the current mining technologies is a little better than before but still causes great damage to the environment.“Holes are dug on the mountain, inside which chemical agents are infused to get the rare earth. Previously oxalic acid was the most common chemical agent but now it is replaced by ammonia sulfate. Anyway, both of them are poisonous.”
“To acquire one tone of oxidized rare earth needs seven to eight tons of ammonia sulfate, which could be fatal if they penetrated into the underground water,” said Su Bo.
What’s worse is that it is not where the pollution ends. The process of separating pure rare earth from the oxide can produce a lot of pollutant for the environment too. Some of the small processing factories have a few or even no environment-friendly devices to neutralize the chemicals that might pollute the air, water and earth during the separation.
“The surveys I made in many places told me that some factoriesC many of them could even only be called family-run workshops C had no scientific design, no suitable devices and no qualified workers. I cannot believe that such factories are suppliers of rare earth in China,” said an official from the Ministry of Industry and Information Technology.
Not only these family-run workshops could pollute the environment, those big companies cannot assume the responsibility of reducing the pollution either. By now, Baotou Steel Rare Earth, which is the largest rare earth supplier in China, cannot pass the national environment protection qualification examination. The Ministry of Environment Protection published the list of “qualified rare earth mining and processing companies” last November and this April. 56 enterprises are considered to be qualified but Baotou Steel Rare Earth is not one of them.
Production Capacity and
Environment Protection Out of Control
Why can the rare earth industry cause so much pollution? Apart from the lack of corporate responsibility, the invalid management and control of this industry should be blamed as well.
It is strange that some enterprises with the membership of the Chinese Association of Rare Earth still buy rare earth resources produced in illegal methods. The government exhorted these misbehaved enterprises to stop this activity but they turned a deaf ear on the exhortation.
Presently the maximal amount of rare earth that can be produced in one year is around 100 thousand tons. But the total production capacity reported by different places in China exceeded 390 thousand tons. Though the actual amount of rare earth might be lower given the false reports of some enterprises, it was still far above the upper limit.
Part of the out-of-control production capital could be attributed to the excessive and illegal mining, which could also be blamed for the environment pollution.
A senior executive Baotou Steel Rare Earth complained that the environment protection rules only work for legal enterprises, while these family-run workshops and small enterprises are completely free from the restrictions.
Another big rare earth company’s executive said that the companies abiding by the law could only account for a small portion of the total production capital but they are placed under the strictest supervision. “Some illegal enterprises even have no legal representatives. It is hard to find who should be blamed for accidents if they happened.”
In his own opinion, the enterprises that smelt and separate rare earth oxide have excessive production capacity which greatly outnumbers the supply. In recent two years many enterprises, driven by profits, opened smelting factories without approvals, leading to the uncontrollable increase of production capacity.
“The relevant government departments indeed took actions, but at the wrong targets. They set up strict rules for state-owned and big enterprises but neglect the small and illegal workshops. We have to afford the cost of dealing with the environment pollution though much of it was caused by us,” said the executive. Limiting Export for the Good of Environment
The pollution to environment is related with the strategic decision of the country’s policy of rare earth export. It is also the key for the dispute of international rare earth trade.
From last year, China intensified its adjustment in the rare earth industry, which greatly raised the international rare earth price and relevant trade disputes.
Now the United States, European Union and Japan have already filed against China to WTO for China’s limitation of rare earth export. In addition, some of the countries plan to make use of their own rare earth resources. Many companies in the United States, Australia and Canada have already moved into that industry. According to the governmental official, there are 406 rare earth projects outside of China run by 250 companies in 36 countries. But only 35 of them have fast progress and can be put into production soon. That means the world is still relying on rare earth exported by China for a while.
Experts suggest that China should change the policy about exporting rare earth. Some light rare earth elements, such as praseodymium and neodymium, should not be considered strategic resources since their reserves are big. The restriction should focus on middle and heavy rare earth elements.
However, it is an undeniable fact that China had to endure great environment cost for being the rare earth supplier of the world. Therefore, China should not be blamed for limiting rare earth export, no matter for protecting environment or preserving its own strategic resources.