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China shuts down rare earth plants over ‘environmental concerns’

(ATF) China’s Environment Agency, previously a toothless dragon, has suddenly announced a rollout of rare earth production shutdowns – at the same time as the country’s international rivals scramble to find alternative rare earth sources around the globe.

The Central Ecological and Environmental Protection Inspection Team is to carry out inspections at various sites across China, with some shutdowns already announced. 

The environmental agency is finally acting having been accused of standing by as China’s modern industrial revolution polluted land, rivers and air. As the demand for rare earths continue to peak, these shutdowns will be a major inconvenience for high tech firms around the globe. China accounted for 58% of global rare earths production in 2020.

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The agency announced that in Jiangxi Province, from this week, most of the separation plants in the Longnan area have already stopped or have reduced production, the area’s remaining companies will also cease production for a month from this weekend. 

The production suspension has also affected the sector’s factories. In Ganzhou, plants that convert at least 1,200 tons of neodymium praseodymium oxide will be shut, 21 Finance reported.

On the demand side, the green economy, dominated by new energy vehicles, variable frequency home appliances, and wind power, continues to grow at a high rate, driving the supply of neodymium praseodymium oxide into short supply, and prices continue to rise.

According to the rare earth magnetic material data section of xuangubao.cn, Minmetals Rare Earths’ Jianghua Rare Earths facilities were put into production in 2020. 

MINING LICENCES

On top of this, the company is actively promoting the processing of Shenggongzhai Rare Earth Mine’s mining licences, and looking for further breakthroughs in exploration and mining work within this year.

Meanwhile, Guangsheng Nonferrous Metals, the only listing platform of Guangdong Rare Earth Group, one of the six major rare earth industry groups in the country, now controls three mining enterprises, four separation plants and one metal processing plant. It is also part of two rare earth metal magnetic material manufacturing projects. 

The shutdowns, and licensing developments, all contribute to the erratic China supply issues which have prompted countries such as Britain, Japan and South Korea to look at finding rare earths outside of China. The United States has also spent large sums building its own rare earth plants. 

As China has expressed its ambitions to dominate rare earths globally, and even in space in the future, many other countries around the world are looking at obtaining their own mining rights and also mastering advanced processing technologies. 

PACIFIC PROJECT

The UK has taken the lead, according to Tencent news, mostly due to advanced battery technology, and it has now established a deep-sea rare earths project in the Pacific.

According to British survey statistics, quoted by Tencent, tens of thousands of tons of nodules of ore were discovered in an area of the deep ocean in the Pacific, rich in various rare earth minerals such as copper, nickel, and chromium. It is expected to produce 3 million tons of rare earths in 10 years.

But China’s rivals will find it very difficult to avoid doing business with them. China’s rare earths supply chain is the result of decades of investment and development work by its researchers.

Also on ATF:

Rare earth market holds its breath as Greenland votes against mining

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Chris Gill

With over 30 years reporting on China, Gill offers a daily digest of what is happening in the PRC.

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