Paying for China’s rare-earth “black hole”

Guest post by Zhang Yingying

Ganzhou prefecture in Jiangxi province is southern China’s major hub for rare earth metals production. In 2011 the province’s rare earth metals industry made an annual profit of 6.5 billion yuan, according to data released by Jiangxi Commission of Industry and Information Technology. However, on April 8 during the first meeting of the China Rare Earth Industry Association, vice minister of industry and information technology, Su Bo, described the “giant black hole” of rare earth pollution. He said that the cost of mining rare earth metals was shocking. The costs of cleaning up environmental pollution caused by one of  Ganzhou’s rare earth mines is estimated to be more than 38 billion yuan.

The Chinese government has given Ganzhou strict orders to deal with the environment problems, reduced the number of mines from over 1000 mines to about 100, and cracked down on illegal mining. But because Ganzhou’s rare earth mineral deposits are widely dispersed, and relatively shallow, they are easy to mine; many mountain and forest areas distributed among farmers also have rare earth deposits, making the situation very difficult to monitor. According to a report in China Economic Weekly, local private mining is still common practice.

In Ganzhou, for a time rare earth mining was carried out using a controversial technique called “mountaintop removal.” First the trees are cut down, the grass dug up, and finally the top soil is removed.  During this process, the surrounding mountain and vegetation are destroyed beyond repair. Additionally, rare earth mining produces over 2 million tonnes of wastewater each year containing 300mg/L – 5000mg/L of ammonia nitrogen ( ten or hundred times over the national limit), according to estimates from the environmental protection bureau. The most serious problem is ammonia nitrogen pollution in water and soil; when it rains, soil containing high levels of ammonia nitrogen seeps into and pollutes agricultural land.

Su Bo explained that the rare earth recovery rate is 60% for state-owned enterprises 40% for private companies and as low as 5% for illegal mining. Furthermore, existing technology cannot solve pollution problems. National ministries are investing funds to address this issue. For example, the programme of the Ministry of Land and Resources to reclaim arable land, soil and waste water treatment programmes run by the Science and Technology Bureau, the Ministry of Science and Technology, and the Ministry of Industry also target mining. But because such large areas have been destroyed and the administrative costs are so high, the investment of national committees is insufficient to address the problem.

The environmental costs do not compare to the huge profits made by China’s rare earth industry. Because of excessive mining and blind competition, rare earth exports have become as dirt cheap. Between 1990 and 2005, Chinese rare earth exports increased nine times, but prices fell by more than 55%. In an interview with China Economics Weekly, assistant president of China Minmetals, Wang Jionghui said: “In the past, we sold all our raw materials, not paying attention to the end use. After initially processing rare earth metals worth 1 yuan, we would sell them for 10 or 20 yuan to Europe and American to made products.  We would then spend 1,000 yuan to buy it back.” Looking at it this way, with the development of China’s rare earth industry the costs far outweigh the benefits. 

Translated by chinadialogue volunteer Marta Casey