China justifies rare-earth policies
By Jake Thomas, Resource Recycling
China's government has released a white paper explaining its policies on its rare earth metals industry, which provides much of the world with the materials needed for a variety of high-tech goods. In particular, the document explains the rationale behind the country's decision to clamp down and restrict the flow metals that are in demand worldwide.
According to the white paper , China has 23 percent of the world's total reserves, mainly in Baotou in the Inner Mongolia Autonomous Region, as well as in the Sichuan, Ganzhou, Jiangxi and Fujian provinces. It also states that China can produce over 400 varieties of rare-earth products in more than 1,000 specifications. Additionally, in 2011 China produced 96,900 tons of rare-earth products, according to the paper, accounting for more than 90 percent of the world's output with sales of the material approaching nearly 100 billion yuan ($15.7 billion) annually.
According to the paper, gone are the days of a "small, scattered, and disorderly" rare-earth metals industry." Instead, according to the paper, the sector is now modern and rapidly growing.
"Since the introduction of the reform and opening-up policies in the late 1970s, China's rare-earth industry has seen rapid development," reads the paper. "Major progress has been made in the research and development of relevant mining, smelting and utilizing application technologies, and the increasing expansion of the industrial scale has basically satisfied the needs of the nation's economic growth and social development."
However, all this development has come at price, according to the paper, taking a harsh toll on the environment. It also notes that the sector has an "irrational industrial structure," with an over capacity in smelting and separating, while research and development is lagging behind in some areas. Additionally, the documents states that prices of the materials does not reflect value, especially compared to other metals.
In response to these problems, the Chinese State Council has issued guidelines to the industry, "attaching more importance to the protection of resources and the environment, and the realization of sustainable development." It mentions the founding of the Association of China Rare Earth Industry to promote self-discipline in the sector.
All of these measures are effectively aimed at controlling and restricting the total volumes, mining, production and consumption of the metals, setting a quota for that materials that will be brought to the international market.
The paper also includes a chart showing that the bulk of the minerals go to Japan at 56 percent, followed by the U.S. at 14 percent and the rest going to various countries in Europe.
The state-run Xinhua news agency reports that the paper was introduced to give the international community a better understanding of China's rare earth metal policies, probably because some members of the international community are not pleased with the country’s actions.
The U.S., Japan and the European Union are preparing to argue before the WTO that the new restrictions violate international trade agreements.
There have also been other responses to China's action. There have been calls to step up recycling of rare earths, and auto maker Honda is launching a rare earths recycling initiative .
Vietnam and Japan are also collaborating on challenging China's grip on the material. Others are looking into finding a substitution for the materials.
The white paper states that China will follow World Trade Organization regulations and would like to see more rare earth metals recycled.