Beijing strengthens oversight over rare earths

08:45, February 17, 2011      

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China will strengthen oversight over rare earths production and exports beginning this year in a five-year attempt to phase in an environmentally-friendly and sustainable industry, the State Council said yesterday.

Stricter mining policies and environmental standards are being studied by relevant government agencies, which are expected to set reasonable yearly production and export quotas for the rare earths, indispensable minerals used in some high-tech goods and military equipment.

Chinese Premier Wen Jiabao told a State Council meeting Wednesday that the industry's development had been haphazard in the past years, with illegal mining and chaotic exports harming sustainability of the industry.

"There are still problems with the development of the rare earths sector ... and considerable chaos in export orderliness. These are seriously affecting the healthy development of the sector," Premier Wen said.

The meeting reached a policy consensus that will "reasonably set annual quotas for production and export" but it gave no details. Analysts said that the central government will tighten environmental controls and shut down unauthorized production scattered in the vast country.

A statement by the State Council said that China will encourage mergers to create more technologically advanced rare earths producers.

China will "establish healthy development of the rare earths industry with appropriate development, orderly production, high utilization and technological advancement," the State Council said on its website, www.gov.cn.

Rare earths are comprised of 17 highly valuable minerals and are widely used in high-tech industries ranging from flat screen televisions, hybrid cars to missiles. China produces up to 97 percent of the world's total supply although it has only about 30 percent of global reserves.

The United States, Canada and Australia have rare earths but stopped mining them in the 1990s as lower-price Chinese supplies became available.

The Commerce Ministry under the State Council said exports of rare earths rose 14.5 percent in the first 11 months of 2010 over the same time of 2009 despite the government decision to reduce sales. However, the ministry did not explain why the government's quota was exceeded.

In December, the ministry publicized this year's first batch of export quotas, 14,446 tons - an 11-percent drop from the corresponding figure for 2010. And, The Ministry of Environmental Protection approved in December new industry standards for the sector to reduce pollution.

People's Daily Online

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