CHINA will consolidate production of rare earths and cut down on the number of exporters in a clampdown on environmental degradation.
Chinese officials are signalling greater efforts to tie the export of rare-earth metals to tougher environmental standards, suggesting that worries over supplies of the critical elements could continue.
China's Ministry of Commerce said it will require exporters who apply for export quotas on the metals - used by everyone from battery makers to car companies - to ensure that best practices are adopted during their mining and processing.
Exporters that cannot deliver such assurances will be blocked from exporting.
The ministry said the strategy is intended to “increase rare-earth production concentration and cut the number of export enterprises”.
The environmental toll of rare-earths mining was outlined by a top Chinese researcher at an industry conference in Hong Kong last week. The process produces waste that has “led to heavy pollution of the atmosphere, water and land”, said Chen Zhanheng, a researcher at the Chinese Society of Rare Earths, according to a presentation reviewed by The Wall Street Journal.
Beijing's rare-earth policies reverberate globally even when they are designed to address domestic issues such as pollution.
China mines, produces and processes about 97 per cent of rare-earth elements. The metals are used in every-day products like Swiss watches and applications including petroleum-cracking, but they also may have futuristic uses.
A tightening of export quotas this year sent global prices soaring as buyers worried about supplies, especially in the largest importing nation, Japan. While Beijing has said it will maintain quotas, it has moved in recent weeks to soothe worries over tight supplies.
The topic was broached over the weekend at the Asia-Pacific Economic Co-operation forum in Yokohama, Japan, which included the leaders of China, Japan, the US, Australia and other Pacific-rim economies.
“It seems that the Chinese side is saying it doesn't intend to use (rare-earth minerals) as some kind of a tool,” Japanese Prime Minister Naoto Kan said at a Yokohama news conference overnight. “I'd like to calmly deal with this issue after determining how China will respond from here.”
Details of the Chinese Ministry of Commerce's environmental directive were minimal. Its statement said companies handling the materials for export “should comply with related regulations on development plans, policies and management of the rare-earth industry and obtain the ISO 9000 quality-system certification”; that certification is a reference to standards of the International Organisation for Standardisation representing good-quality management practices.
While the Commerce Ministry's power to remake the rare-earths industry or dictate export policy is limited, industry participants say Beijing is serious about cleaning up the industry. Rare earths often exude radioactivity, and dangerous chemicals are used to separate them from other minerals.
At the Hong Kong conference, researcher Mr Chen cited Chinese miners’ “sabotage of nature”, and “pollution by waste water, slag and gas in smelting and separation” during procession as well as the industry's large-scale use of acid and alkali.
Mr Chen alleged that the product smuggled out of China often originates from the dirtiest facilities, and uncontrolled mine development had shrunk China's untapped reserves to less than a third of the global total, from more than 40 per cent in 1998.
Some industry experts who listened to Mr Chen said the starkest element of the presentation was his use of satellite imagery to illustrate how landscapes around China's production facilities now feature lifeless terrain and radioactive lakes.