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Report: China considering tightening rare earths mining safety

By the CNN Wire Staff
  • Such a move probably would lead to higher prices for electronics
  • New standards could shut down uncompetitive miners, state media says
  • That would boost the cost of the minerals, which are used in a wide range of products
  • The products include mobile phones, batteries, hybrid cars and guided missiles

Beijing, China (CNN) -- China is considering clamping down on pollution tied to the mining of rare earths, state media said Monday. Such a move probably would lead to higher prices for electronics around the world that include the minerals.

"We heard the new standards will be strict, which will force uncompetitive miners out of the industry," said mining executive Zhang Zhong, according to the Xinhua news agency.

The move will boost the production costs of rare earths, said Zhang, general manager of the Inner Mongolia Baotou Steel Rare-Earth (Group) Hi-Tech Company, the country's biggest rare earths producer, according to Xinhua.

China holds about one-third of the world's rare earth deposits, but accounts for 95 percent of global output. The minerals are vital in manufacturing a wide range of products -- both civilian and military -- from mobile phones, batteries and compact fluorescent light bulbs to hybrid cars and guided missiles.

The nation aims to upgrade rare earths production safety, Xinhua said, citing Yang Wanxi, a government adviser involved in writing a new regulation.

A draft has been filed with the Ministry of Industry and Information Technology, which is seeking industry review, Yang told Xinhua. Under the proposed standards, less ammonia nitrogen would be allowed in wastewater from rare earths production.

Rare earths comprise 17 elements, including scandium and yttrium, and lanthanides. In reality, they are not rare, according to former U.S. Geological Survey official James Hedrick. But the amount of economically exploitable concentrations are limited. And mining them damages the environment.

"Other countries haven't developed the mines, because almost all of these rare metals come with elements that are radioactive or poisoning," Hedrick said. "Everyone is getting them cheap and easy from China without having to do the dirty work."

Hedrick, now an official at a large U.S.-based rare earth deposit owner, said a processor in California that hopes to open its mine next year "would probably be the earliest that rare earth would be available from a large source."

The world has depended on China for rare earths for decades, he said.

Beijing's critics see China using its monopoly as a weapon in trade or political disputes.

China reportedly stopped rare earth shipments to Japan, the world's largest rare earth importer, after the Japanese coast guard detained a Chinese trawler captain near an island claimed by both nations.

Beijing has disputed the allegations, saying it will not halt its rare earths exports, but that safety improvements are needed. China also says it must avoid depleting its resources.

The country stopped issuing new rare earths mining licenses in 2006 and has closed hundreds of small mines, Xinhua said Monday.

Draft guidelines issued in September call for cutting the number of China's rare earths companies to 20 from 90 in the next four years.

Some analysts say Beijing's motives are more commercial than political.

"They are the largest consumer of the metals in the world and are really moving into high-tech," said Martin Hennecke, an associate director at Hong Kong-based consulting firm Tyche Group.

"They want to secure their own supply, because China is consuming 60 percent of those metals there."

China's actions have prompted calls in the United States to resume domestic production, with the House of Representative passing a bill aimed at redeveloping the industry. But that would take time.

CNN's Steven Jiang contributed to this report.