China Daily Counts Rare Earths’ Environmental Cost

As the US, EU and Japan pursue a WTO case against China for allegedly abusing its near monopoly over rare earth supplies, China Daily argues that tightening control is a necessary environmental protection measure, not an economic weapon.

Jiangxi province, rich in rare earths minerals in China, earned 32.9 billion yuan ($4.89 billion) from this industry last year, but it has to spend 38 billion yuan to tackle the environmental pollution in Ganzhou, one city in the province, according to an Economic Information report ….

“When I saw so many forests turn to dead bare hills because of rare earths exploiting. I only feel sad,” [Su Bo, vice minister of Ministry of Industry and Information Technology of China] said, “The hills are not what you see. It’s deteriorating from within ….”

“Protecting the natural resources and people’s health is our responsibility, not an excuse to limit rare earths exports, purported by the EU,” Su said, “We will not loosen the control on the industry.”

Rare earths are all but ubiquitous in high-tech electrical and electronic goods, from electric motors to earphones. But the threat of supply disruptions and price spikes has led manufacturers to seek alternatives. This week, Hitachi unveiled a new, rare earth-free electric motor. From AFP, via The Verge:

The prototype 11 kilowatt motor does not use magnets containing rare earths and is expected to go into commercial production in 2014, the company said.

Hitachi started work on the project on 2008. Other Japanese firms, including automaker Toyota, have been working towards the same goal, spurred on by high prices of the minerals.

Permanent magnet motors usually contain rare earth such as neodymium and dysprosium and are in increasing demand for the growing number of hybrid and electric vehicles.

A third approach to escaping China’s dominance is to diversify the supply by re-opening old mines and perhaps even exploiting deposits on the Pacific floor. But memos leaked last year from a controversial processing plant under construction in Malaysia, like the new Economic Information report cited by China Daily, illustrate why the rest of the world has preferred to leave rare earth extraction to China.