China Weighs Tighter Controls on Rare Elements

China is planning to tighten its control over its rare earth minerals by allowing just a handful of state companies to oversee the mining of the scarce elements, which are vital to some of the world’s greenest technologies.

The State Council, China’s highest legislative body, is weighing a proposal to put the government in control of private and unauthorized mines that produce rare earth minerals, a strategic resource that much of the world depends on, according to China Daily, the official English-language newspaper.

Chinese miner
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Chinese miner

Rare earth minerals are an unusual group of natural elements that are vital for high-performance electric motors in hybrid cars, wind turbines, efficient light bulbs and even missiles. China now accounts for over 90 percent of the world’s production of the minerals.

Some governments and global companies have recently expressed concern about whether China is planning to restrict exports of its rare earth minerals or force global companies to move factories to China to complete production of items using the minerals.

Last year, China distributed a draft policy to foreign executives that called for barring the export of some of the rare earth elements that are in the shortest supply, and happen to be mined mainly in southeastern China using some of the most environmentally damaging techniques. That worry led to a scramble to develop alternative mines in other parts of the world.

The U.S. Congress even ordered a study of alternative sources because of the American military’s dependence on China’s supply of rare earth minerals.

But Chinese officials say they want to tighten control over the precious resource because the mining of rare earth minerals has led to environmental ruin and chaotic development.

Industry experts in China say large supplies of the nation’s rare earth minerals are illegally exported and highly undervalued, and that foreign companies are not paying the cost for the environmental damage left behind.

“We want a higher price on our rare earth minerals,” said Zhang Anwen, deputy secretary general of the Chinese Society of Rare Earths, a government-affiliated research organization in Beijing. “Foreign buyers should more or less share our costs, including the high cost of reducing environmental pollution.”

Mr. Zhang said he was not aware of a proposal going to the State Council but that it was probable that state companies would control a large part of the industry.

According to China Daily, the plan under consideration in Beijing would allow state companies to sharply consolidate the industry, possibly altering the way these valuable minerals are mined and exported.

The newspaper said Wednesday that the National Development and Reform Commission and the Ministry of Industry and Information Technology had each submitted a draft proposal for such a plan to the State Council.

But Wednesday, a spokesman for the commission said he was unaware of the proposal. A spokesman for the Ministry of Industry and Information Technology could not be reached.

China’s state-run news media said a few major state-owned companies would be likely to assume control in order to better protect the rare minerals.

China has announced plans to begin a six-month crackdown on illegal mining of rare earth elements starting this month.

Ian Chalmers, a managing director at Alkane Resources, a rare earth mining company in Australia, said that China had been planning such a move for several years, partly to manage the devastating pollution generated from mining the minerals.

“This could help their environmental credentials and show they’re cracking down on illegal behavior,” Mr. Chalmers said in a telephone interview Wednesday. “And I think they’re smart enough not to try to cut off the world’s supply. This should be a good thing.”

Bao Beibei contributed research.