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China caps emissions for rare earth miners
New rules are expected to raise global prices for the 17 'rare earth' metals, which are used in many high-tech devices.
Tue, Mar 01 2011 at 6:52 AM
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EMISSIONS CONTROL: Toxic rare-earth byproducts are discharged into a "rare earth lake" in Baotou, China. (Photo: Weng Huan/ChinaFotoPress/ZUMA Press)
China has tightened its grip over the rare earths industry by setting tough emission limits on miners producing the lucrative metals, which are indispensable in making many high-tech products.
The emission caps on about 15 pollutants will apply to all industry players including miners and smelters of rare earth alloys, the Ministry of Environmental Protection said Monday in a statement.
"The making and implementation of the standards will help raise the threshold for entering the rare earth industry ... and promote the sustainable and healthy development of the sector," the statement said.
The rules will take effect from October 1 for new projects, it said.
Existing players have until the beginning of 2014 to comply with the new standards.
Experts said the regulations would likely increase production costs and push up export prices of the metals — a collection of 17 elements that have become vital ingredients in products ranging from iPods to wind turbines to missiles.
"Prices will rise because ... environmental protection measures will lead to a fall in supply as some miners may have to suspend production," Sang Yongliang, an analyst with Guotai Jun'an Securities in Shanghai, told AFP.
"This is also an approach by the government to consolidate the industry."
Until now China has had lax restrictions on emissions in the rare earth industry and therefore pollutants generated by the sector "had not been effectively controlled," the ministry said.
China, which produces more than 95 percent of the world's rare earths, has tightened control over the elements by cutting quotas for overseas shipments and hiking export taxes, triggering mounting complaints abroad.
In December, the United States called on China not to use rare earths as a "trade weapon" after Japanese industry said Beijing temporarily cut off exports in 2010 amid a territorial row.
China has denied any political motivations, insisting the tightened oversight was due to environmental concerns and the need for a more sustainable approach to the harvesting of its rare earth deposits.
The commerce ministry said late last year it had slashed rare earth export quotas by about 35 percent for the first six months of this year, but added that did not necessarily mean full-year export quotas would drop that much.
The country is building strategic reserves of the metals and has brought 11 rare earth mines under state control as it consolidated the industry — another move analysts said could drive up prices.
Copyright 2011 AFP Global Edition
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China uses a 17% value added tax to remove the embedded cost of taxes on its exports, but if you produce Rare earth elements hear in America, your product is burdened with domestic income, corporate income, capital gains, payroll, self employment and other taxes embedded in its cost, while the Chinese products compete virtually free of embedded cost of taxes and also get some safemeds for the workers who get infected with something toxic.