Rare Earth

China Tries to Clean Up Toxic Legacy of Its Rare Earth Riches

Background Summary:

In two decades, China’s environment problem is in a heavy damage. One of the main reason that the problem China face is caused by unregulated rare earth mining and refining. Now, government has begun spending billions of dollars to clean up the damage. But this environmental impact is becoming an international trade issue. The World Trade Organization panel in Geneva expected to issue a crucial draft report about this problem. Some industry executives and official said that this issue’s result may not make a big difference to the rare earth industry itself. But the case does seem to have had a unintended effect of helping to goad China into a major environmental cleanup.

Data:

* China’s share of global production reduced from 95 percent to 85 percent in three years.

* Dysprosium is a kind of rare earth sells for $243 per pound before sept.2010.

* After China’s embargo on the export of dysprosium, it prices soared as high as $1135 per pound.

* The global oil industry has begun using less rate lanthanum down from 4 or 5 percent to 1.5 percent now.

* Chinese media have reported that ten of thousands of goats and other livestock there have died and many baby goats have been born severely deformed, possibly because of radioactive contamination from the rare earth industry.

* There are 99 percent of the country’s legally mined rare earths are produced by just 10 companies, all with varying degrees of state control.

Analysis:

China may lost the case

* First of all, because in the domestic rare earth mining and consumption in China has not taken the corresponding measures, so this may become China’s weakness in the lawsuit.

* Secondly, China’s officials and experts don't very clearly understand the WTO rules. WTO stipulates no quota, but we are obvious to get quotas in rare earth.

* Environmental problem may be a good reason to export restriction, but the reason...