This month China will start forcing rare earth producers out of business if they don’t qualify for new value-added tax permits being allocated.
It’s China’s latest bid to curb resource plundering, dangerous artisanal mining and widespread pollution.
China produces over 95% of the world’s REEs used in a variety of industries including green technology, defence systems and consumer electronics and the country's monopoly is currently before the World Trade Organization for arbitration.
A recent report by state news agency Xinhua paints a particularly grim picture of China's rare earth industry which belies the notion, held by many in the West, that China's crackdown has more to do with managing supply and extracting lofty profits than it is about cleaning up a notoriously dirty business.
To the contrary, according to China's Ministry of Industry and Information Technology, repairing the environmental damage in Ganzhou in Jiangxi province, the epicentre of rare earth mining in the country, will cost a total of 38 billion yuan ($6 billion).
That compares to the profits of the province's rare earth industry of 6.4 billion yuan last year.
Xinhua reports via China Daily on the plight of Zhang Yang'e a 73-year-old farmer near the city of Ganzhou:
A green hill where the mine was built has been scraped and turned into a cratered landscape not unlike that of the moon, with piles of rock tailings nearly as high as Zhang's two-story house.
Trees on the hill have been toppled and topsoil has been removed. Chemicals have been pumped into holes drilled in the ground to help recover the rare earth metals located there, Zhang said.
Similar open-pit mines can be found dotting the densely wooded hillsides of Longnan county, which is about a half-hour drive from Dingnan. Plastic pipes and chemical holding tanks can be seen at the foot of the hills. Some of the tanks are filled with a bright blue liquid, while others contain a dark brown solution.
To exploit rare earth metals, some miners use a chemical extraction process that involves digging several holes of just a few feet in depth and feeding pipes into the holes. A concentrated mixture of chemicals is then pumped through the pipes, sinking into the clay below and leaching out rare earth metals as it passes.
It seems incredible that such a low-tech method is used to harvest minerals that are used in some of the world's most technologically advanced products.
