中文4870字
China's Rare Earth Elements Industry: What Can the West
Learn?
By Cindy Hurst
Corporate Author: INSTITUTE FOR THE ANALYSIS OF GLOBAL SECURITY WASHINGTON DC
Personal Author(s): Hurst, Cindy
Report Date: MAR 2010
Pagination or Media Count: 43
Institute for the Analysis of Global Security (IAGS)
U.S. Army Foreign Military Studies Office, 731 McClellan Avenue, Fort Leavenworth, KS, 66027
Cindy Hurst is an analyst for the U.S. Army’s Foreign Military Studies Office, Fort Leavenworth, KS
Introduction
China controls approximately 97 percent of the world's rare earth element market. These elements, which are not widely known because they are so low on the production chain, are critical to hundreds of high tech applications, many of which define our modern way of life. Without rare earth elements, much of the world's modern technology would be vastly different and many applications would not be possible. For one thing, we would not have the advantage of smaller sized technology, such as the cell phone and laptop computer, without the use of rare earth elements. Rare earth elements are also essential for the defense industry and are found in cruise missiles, precision guided munitions, radar systems and reactive armor. They are also key to the emergence of green technology such as the new generation of wind powered turbines and plug-in hybrid vehicles, as well as to oil refineries, where they act as a catalyst. (Note: for more in-depth information on the specific uses of rare earth elements, refer to Appendix A).
Over the past few years, China has come under increasing scrutiny and criticism over its monopoly of the rare earth industry and for gradually reducing
export quotas of these resources. However, China is faced with its own internal issues that, if not addressed, could soon stress the country's rare earth industry.
This paper is designed to give the reader a better understanding of what rare earth elements are and their importance to society in general and to U.S. defense and energy policy in particular. It will also explore the history of rare earth elements and China's current monopoly of the industry, including possible repercussions and strategic implications if rare earth elements supply were to be disrupted.
The Issues China Faces
According to Zhao Shuanglian, Vice Chairman of Inner Mongolia’s Autonomous Regions, “Rare earth is a unique treasure, and it is also Inner Mongolia’s primary strategic resource.”While China possesses approximately 57 percent of the world’s reserves of rare earth elements, the industry within China is plagued with disorderly development and poor management practices. The Chinese government fears that if the current poor mining practices and lack of regulation continue, China will “become a rare-earth poor country, or even a country without rare earth elements.”Other issues facing China’s rare earth industry are smuggling and illegal mining activities, environmental damage due to poor mining practice, and the growing challenge of ensuring its own domestic needs of rare earth.
Smuggling
According to China Business News, due to the annual increased demand for rare earth elements, man
y buyers are resorting to smuggling rare earths out of China. In 2008, approximately 20,000 tons of rare earth were reportedly smuggled from the country. Meanwhile, during that same year, according to official customs statistics, China exported 39,500 tons of rare earth oxide. This means that smuggling accounted for one-third of the total volume of rare earths leaving China.
One aim of China’s “Rare-Earth Industry Development Plan of 2009-2015” is to try to curb some of the smuggling by introducing regulations and policies to punish the smugglers. Smuggling is potentially detrimental to China’s rare earth industry because it keeps prices low and depletes resources quicker. Smuggling
also indicates a severe lack of control over the industry and can lead to even greater repercussions such as more damage to the environment. Regulations on safe mining practice are nearly impossible to enforce in this type of environment. As it is, because of poor management practices and the large scale of the industry, China already has difficulty in enforcing regulations to improve safety and environmental measures in its rare earth industry.
Severe environmental damage
A major concern surrounding China’s practice of mining rare earth elements is the negative impact it h
as to the environment due to lax mining practices. There are a number of potential environmental implications to mining rare earth elements if not done properly. Unfortunately, because of the revenue potential, many rare earth mines have been operating illegally, with no regulation, causing severe environmental hazards, which exacerbates the problem.
In 2005, Xu Guangxian wrote that thorium was a source of radioactive contamination in the Baotou area and the Yellow River. According to a local source, who asked not to be identified, “In the Yellow River, in Baotou, the fish all died. They dump the waste – the chemicals into the river. You cannot eat the fish because they are polluted.” Some 150 million people depend on the river as their primary source of water.
Under traditional technology means, refining rare earth elements requires such chemicals as ammonium bicarbonate and oxalic acid. The potential health hazards of ammonium bicarbonate include: Irritation to the respiratory tract if inhaled, irritation to the gastrointestinal tract if ingested, redness and pain if it comes in contact with the eyes, and redness, itching, and pain if it comes in contact with the skin. Oxalic acid is poisonous and potentially fatal if swallowed. It is also corrosive and causes severe irritation and burns to the skin, eyes, and respiratory tract, is harmful if inhaled or absorbed through the skin, and can cause kidney damage. These and other chemicals often find their
reactive翻译way into the Yellow River.
Safety standards in China are lax. “People in their 30s have died of cancer working around the mines, possibly from radioactive materials,” said one local
so urce. “I visited a factory many times. When I visit a factory or workshop, I tell the director of the workshop, ‘would you tell the laborers to put their mask on
when they are doing their job?’ He said, ‘Oh yeah. We do every time, but it’s too hot. They do n’t want to keep their mask on.’ You can see that the air is dirty and they are breathing it all in.” The most common disease in Baotou is pneumoconiosis, better known as black lung. There are 5,387 residents in Baotou who suffer from black lung, which makes up more than 50 percent of the cases in the autonomous region.
While China might have general pollution control standards, the country has never actually worked out pollutant discharge standards for the rare earth industry. As the rare earth industry in China has rapidly grown, there has been no effective way to control the usual pollutants such as ammonia, nitrogen, and thorium dust, which are emitted during the production phase. Furthermore, general health and safety regulations are often ignored for a number of reasons, including: • The industry is large and challengin
g to monitor.
• People and companies are not being held accountable. For example, in Western society, if an employee dies or becomes ill, repercussions could include a lawsuit or life-long pension which the company is obligated to fulfill. This is not the case in China.
Domestic consumption is a priority
With 1.3 billion people and the fastest growing economy in the world, China is faced with the challenging task of ensuring it has adequate natural resources to sustain economic growth, while also trying to appease the international community, which has been protesting China’s cuts in rare earth export quotas.
According to Wang Caifeng, in 2008 China used 70,000 tons of rare earth elements. Global consumption was 130,000 tons. China exported 10,000 tons of rare earth magnets worth $400 million and 34,600 tons of other rare earth products worth $500 million.
There are numerous examples that point to China’s anticipated increase in
rare earth consumption. For example, at the end of July 2008, China had 600 million cell phone users.
Less than one year later, by the end of March 2009, China had 670 million cell phone users. New technologies, such as the third generation (3G) networks, have boosted the sale of cell phones, a trend which will likely continue as more and more Chinese citizens buy cell phones and others upgrade to
the new technologies. Putting it into perspective, in China, approximately 50 percent of the population has cell phones. CTIA, the International Association for Wireless Telecommunications, reported in October 2008 that the U.S. (with a population of 304 million people as of July 2008) had more than 262 million wireless subscribers. This means that 86 percent of the entire U.S. population had cell phones. If China were to follow the same technological growth patterns as the U.S., the country could one day have approximately 1.1 billion cell phones or more.
In another example, the use of solar and wind power are set to increase exponentially in China. Green energy technology is expected to become the largest consumer of rare earth elements in the future. According to Mark Smith, Chief Executive Officer of Molycorp Minerals, the company that owns and operates the Mounta in Pass rare earth mine in California, “We’ve coined the term, ‘the green elements.’ because there are so many applications right now hybrid electric vehicles, wind powered generation …permanent magnet generators, compact fluorescent light bulbs … Just to name a few. R
are earths are absolutely indispensable. They (green technologies) will not work without rare earths.”
China’s consumption of rare earth elements is also expected to increase dramatically as more and more foreign companies move their production sites to China to take advantage of the lower cost of rare earths and therefore reduce their overall production costs. This is part of China’s larger strategy to maintain a tight hold on the industry.
China Fights Back before it’s too Late: Imp lications for the West
In 2005, Xu Guangxian called for protective measures in the rare earth industry, warning that rare earth and thorium resources at Bayan Obo were in “urgent need of protection and rational utilization.” Xu pointed out that since Bayan Obo had started off exclusively as an iron ore mine, it did not properly consider ways to recover rare earths and thorium. Since 1958, when Baotou Iron and Steel Works began their mining operations, 250 million tons of ore had been mined at the main and eastern ore bodies, leaving a remaining ore volume of 350 million tons. At the rate that China was mining – 10 million tons of ore per year

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