Inner Mongolia Tries to Cash In on Its Richness in Minerals

The Inner Mongolia Autonomous Region in North China is rich in natural resources. The deposits of many minerals are among the largest in the nation. In particular, the region contains most of the rare-earth minerals in the world. But a poor local economy and a lack of technological know-how make it hard to turn the resources into lucrative products.

Here is home to most of the world's rare-earth minerals. Baiyun Ebo, locally known as Baiyun Aobao, is four hours' drive from the regional capital.

In 1935, large quantities of rare-earth minerals were first discovered. But little was known about these minerals, and even less about their value.

After years of research, scientists have discovered elements extracted from the earth here can be used in almost every industry people can think of --- machinery, electronics, chemical engineering, metallurgy, textiles and even porcelain.

Experts estimate the town has 100 million tons of rare-earth minerals. Their total value? About US$25 billion.

In the local dialect, Baiyun Aobao means 'a mountain full of treasures.' The name is suitable for the place that boasts the largest deposits of rare-earth minerals in the world. But due to poor processing techniques, less than 10 percent of the resources is fully used.

Dozens of factories in the town turn out products for industrial use from the rare-earth minerals. Many of them are owned and run by individuals. Much of the work is done by hand. Production and quality are low; pollution and waste are high.

The rare-earth minerals are exported after being roughly processed. Prices are 40 percent lower than those obtained by other countries such as Japan.

We need to improve our processing techniques. But the funding we have is less than 10 percent of what is needed. A large investment of venture capital is required.

But a lack of funding is not the only problem.

This is China's largest research institute of rare-earth minerals. Since the early 90s, it has been losing its best employees. Many of them are working in the country's more wealthy coastal cities. Others have found jobs in private enterprises which offer salaries more than ten times higher.

To counter the trend, an industrial zone was founded in 1990. It offers tax reductions and lower rents to scientists turned entrepreneurs.

The largest enterprise in the town has gone public. Its processing lines are the best in China. Its products take up more than 60 percent of the world's market.

Still, the brain drain continues.

This official from the research institute says they've done everything possible to keep their employees, but the institute simply lacks funds.

So, despite basically sitting on top of a gold mine with the biggest deposits of most of the world's rare earth minerals, Inner Mongolia remains poor. Production of rare-earth minerals has decreased, making the land's yield far less valuable than it should be.

People's Daily Online --- http://www.peopledaily.com.cn/english/