Prudent use for rare earth resources

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					DECEMBER 10 -16, 2010                                                     CHINA DAILY                      ASIA WEEKLY                                                                         PA G E 7


Prudent use for rare earth resources
Cheap export priCes, limited reservation and environmental Costs unsustainable, expert says


                 efore the break of
                 dawn, a group of
                 miners head toward
                 two huge pits near a
                 brown-colored pla-
                 teau. Over the years,
bulldozers have carved spirals down
into the depths of the cavities where
the workers tap their precious miner-
als. This is the famous Bayan Obo
rare earth mine, 150 kilometers north
of Baotou in the Inner Mongolia
autonomous region.
   Baotou has a population of less than 2.5
million, but it recently found itself on the
lips of many participants at top global policy
meetings such as the G20 summit. Flights to
the city are now packed and teams of foreign-
ers can be spotted at the local airport and
five-star hotel lobbies.
   Baotou is about 650 km from Beijing. Its
Bayan Obo mine contains about 28 percent
of the world’s rare earth reserves. Baotou
Steel Rare Earth, which is listed on the
Shanghai Stock Exchange, satisfies two-fifths                                                                                                                                        cui meng / china Daily
of global demand for the resource. Contain-        the bayan obo rare earth mine in the inner mongolia autonomous region, which holds the majority of China’s rare earth reserves, has used up 65 percent
ing 17 elements, rare earths are used in the       of its 43 million tons of reserves.
manufacturing of products as varied as flat-
screen monitors, electric car batteries, wind      scientists from the Chinese Academy of Sci-        has used up 65 percent of its 43 million           it is extremely important for high-tech and
turbines, missiles and aerospace alloys.           ences, sent Chinese Premier Wen Jiabao a           tons of rare earth reserves in the past three      military applications.
   Baotou’s importance surged significantly        letter in which they strongly urged authori-       decades, with only 28 million tons left.              Rare earth is a collective name for 17 ele-
after China’s Ministry of Land and Resources,      ties to curb output and contamination of the          “At this rate, the remaining 28 million tons    ments, including scandium and yttrium.
in early March, limited the country’s annual       country’s rare resources.                          will be quickly depleted within the next 30           Rare earths are used widely in products
total volume of rare earth production to              Wen directed the proposal to the Ministry       years,” Xu says.                                   from camera lenses and cell phones to nuclear
89,200 tons down by 25.7 percent compared          of Land and Resources and Xu was given a              Xu says countries such as Japan and South       batteries and lasers. Magnetic trains running
with last year. The Ministry of Commerce in        reply in person. China’s rare earth production     Korea have been storing rare earth reserves        up to 400 km per hour in Shanghai need
July confined rare earth exports to an annual      in 2007 shrunk to 80,000 tons.                     that can satisfy their demand for the next 20      the resource. They are also needed in MRI
limit of 30,000 tons, a drop of 40 percent            Xu has been to Bayan Obo eight times and        years. And these were managed at bargain           machines that doctors use to scan patients for
compared to that of 2009.                          has expressed shock at the speed of how the        prices.                                            traces of cancer.
   A number of countries such as Japan have        site’s rare earth reserves have been used up.         “China has been selling rare earth products        As more countries replace oil with sustain-
filed complaints and business groups have          Driven by profit, more than 100 refineries         too cheaply. In fact, some rare earths oxide       able green energy such as wind power, rare
been lobbying to pressure China for more           of different sizes, excluding illegal operators    should be sold at 10 million yuan (US$1.50         earths are all the more precious because they
rare earth exports. US Secretary of State Hill-    and smugglers, sprouted in the area in the         million) per ton. When China uses up its rare      make wind turbine generators stronger and
ary Clinton also raised the issue ahead of last    1990s. The annual rare earth output at that        earth resources, we will have to pay very high     lighter.
month’s G20 summit in Seoul, while coun-           time reached 170,000 tons, well exceeding the      prices for rare earths products from countries        Senior engineer Dou Xuehong, with the
tries such as Germany are turning to alterna-      global demand of 100,000 tons.                     like the US, Australia, Russia and India.”         Research Institute of Rare Earths at the

tive supplies.                                        Xu blamed patent protection in China,                                                              Baotou Iron and Steel Company, came to
   “I strongly disagree with some Western          which was not “adequately established” until                 ao Jian, spokesman for the Ministry      Baotou in his 20s and has seen enormous
media claims that China’s management of its        1984, as well as the failure to form a national              of Commerce, said at a briefing on       changes in the city over the past 40 years.
rare earth resources is a power play,” Peking      rare earths trade association.                               November 16 that “China has export-      Audi and Mercedes-Benz cars are now on the
University Professor Xu Guangxian says.               Statistics published in 2008 by the US                    ed 32,200 tons of rare earths from       city’s six-lane streets. The housing price in
   “China has been exporting separated rare        Bureau of Mines and other geographic               January to September in 2010, among which          the city center has soared to more than 7,000
earths products at very cheap prices without       authorities show that the world’s total rare       49.8 percent went to Japan, registering 16,000     yuan per square meter. The newly opened
considering the resource and environmental         earth reserves of industrial value were 112        tons, up by 167 percent compared to that of        Wanda Shopping Center covers an area of
costs, which is unsustainable and should by        million tons, of which China owned 46              the same period last year.”                        320,000 square meters, attracting global
all means come to a halt.”                         percent at 52 million tons. The US held 13            Yao said that China’s rare earths exports       brands such as Zara and Pizza Hut.
   Xu, who recently celebrated his 90th birth-     million tons, while Russia and surrounding         to the US have grown by 5.5 percent to 6,200          But southwest of the city, about 10 km
day in Beijing, is often referred to as “China’s   countries contained 17 million tons. But with-     tons. Among China’s 32 enterprises qualified       from the city center, there is a 11-sq-km res-
Father of Rare Earths”. Xu, who has a doc-         in two years, China’s share of the resource        to export rare earths, 10 are foreign-funded       ervoir of brownish water that was built in
torate from Columbia University in the US,         dropped to 30 percent, Xu says.                    groups such as French-owned Rhodia Elec-           1956 to contain the tailings left by Baotou
returned to China with his wife in the 1950s.         The only rare earths mine in the US, the        tronics & Catalysis Co Ltd. The annual export      Steel’s rare earths refineries. Both areas will
   He led a group of scientists at Peking          Molycorp complex at Mountain Pass in Cali-         quota for foreign-funded enterprises in 2010       take three hours to walk around, but the one
University to research the extraction of rare      fornia, closed in 2002 in response to envi-        is 5,978 tons and the average export price for     containing the tailings emits a strong chemi-
earths and their methods outdid foreign com-       ronmental restrictions and high production         rare earths products is US$14,800 per ton.         cal smell.
petitors in the 1970s.                             costs. But the Bayan Obo mine, which holds            The rare earths industry is worth about
   As early as 2006, Xu, together with 11 other    the majority of China’s rare earths reserves,      just US$2 billion annually worldwide, but          See “ReSouRce” Page 8

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