China pledges more cooperation, tighter rare earth mining rules

June 20, 2012

In the first white paper of its kind, China announced that it will introduce stricter standards for rare earth mining and will control the mining, sorting and smelting of the minerals more tightly while also pledging more international cooperation.

Saying that it is protecting its own rights and interests, the Chinese government said it will phase out outdated capacity while promoting industry consolidation and improve the relevant legal framework to crack down on violators.

The move could further flare up tensions with key consumers who have accused the Chinese government of interfering in the market to push up prices by artificially limiting supply, Dow Jones Newswires reported.

The United States, European Union and Japan jointly complained to the World Trade Organization (WTO) in March that China was deliberately restricting exports, violating WTO rules.

However, Gao Yunhu, deputy chief of the Ministry of Industry and Information Technology’s Rare Earth Office said the Chinese government is willing to strengthen communication and negotiations with relevant parties to resolve issues related with rare-earth trading, but “will actively use WTO rules to protect the legitimate rights and interests of the country.”

Gao said China’s management of the industry fully complied with WTO rules. China accounts for more than 90 percent of the current world supply of rare earth minerals.

Chinese officials have repeatedly said excessive mining of rare earth minerals is leading to severe environmental damage, including landslides and pollution. The decline of rare-earth resources in major mining areas is accelerating, the white paper said.

The government also disputed U.S estimates of China’s rare earth reserves. According to the United States Geographical Survey (USGS), China’s rare earth reserves totaled 36 Mt (40 million st) in 2009, 36 percent of the proven reserves worldwide.

But according to Jia Yinsong, an official with the Ministry of Industry and Information Technology, an internal ministry survey indicated that China’s reserves totaled 18.59 Mt (20.5 million st) in 2009, just 23 percent of the world total. The USGS has not provided a source for its data, which is inaccurate, he said.

In a related move, the government earlier said it supported Inner Mongolia Baotou Steel Rare-Earth (Group) Hi-Tech Co. to lead national consolidation efforts for northern China’s rare-earth industry.

Baotou, the country’s largest rare-earth producer by output, had encountered difficulties this year when two of its subsidiaries were among a dozen companies that had their rare-earth export quotas held up by the Ministry of Commerce for five months after the companies failed to meet the government’s environmental standards related to rare-earth mining.



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