How China got to the top of the Rare Earths pile

An interview with Professor Fu Zhongde, who was one of the hey scientists in the Chinese ratre earth industry and is now, Chairman of Beijing Xiang Tai Rui Xi Rare Earth New Technology Application Co, in which he discusses REE industry issues, especially with regard to the status of Chinese rare earth processing technology

BEIJING - 

Rare earth elements are often likened to the ‘vitamins' of industry. Their importance is fairly obvious today, with the high technologies developing very fast. As far as we understand, it was Deng Xiaoping who proposed the vision that China needs to strategically develop rare earths. What is the background of this story?

Before the ‘open door' reform policy in 1978, China was one of the poorest countries in the world and hardly possessed any foreign exchange reserves. Even when China's leaders visited other countries, they did not have sufficient foreign currency in hand. At that time, Mr. Deng Xiaoping, the country's paramount leader, said that the "Middle East countries have oil, and China has rare earths. Let us export rare earths to increase our foreign exchange reserves." After implementing deregulation policies, China started to develop rare earths, which were regarded as strategic resources, even though their mining was prohibited before. With time, the rare earth industry's development in China sped up rapidly, exports grew, competition heated up. The whole industry entered a chaotic situation, which harmed the sustainable development in China and the world.

During that disorderly period, the development actually caused adverse effects on people's lives and other industries, such as agriculture. For instance, Jiangxi and Guangdong provinces possess the most abundant heavy rare earth resources in China. But due to the loose management system from central and local government, unlicensed mining became commonplace. Thus, resources were wasted significantly and the environment was damaged dramatically. From and economic point of view, it was also unwise to compete for export sales by continuously lowering prices, which only caused confusion and misunderstanding with foreign buyers. In addition, there was quite a lot of rare earths smuggling. None of these activities were beneficial for trading between countries. Therefore, the government systematically tried to reign in the export of REEs during President Jiang Zemin's time and have strategically governed the mining, production and exporting of REEs since President Hu Jingtao came to power.

Because China's REE industry experienced such painful developments in the past, the government has the responsibility to strictly administer the rare earth industry. One of the objectives is to create an orderly and harmonious trading system. I think in this respect, China's scientific development approach does not have any country boundaries, and makes sense in a global context.

What specific laws or regulations have been formulated and implemented to regulate the REE industry in China?

The regulation that we can refer to here is collectively referred to as the ‘Rare Earth Industry Development Plan', which has been open to the public. There is also a ‘Mineral Resources Law', which is still under revision. Both of them are guidelines for the industry at present. I would like to emphasise that Chinese policies on rare earths are intended to benefit not only the Chinese but the peoples of all other countries in the world.

Will the Chinese government encourage domestic rare earths companies to ‘go global'?

I am afraid the government will not do so. If, on the one hand, the Chinese government regulates the industry and limits rare earth exports, while on the other hand encouraging REE companies to go global, it would be contradictory and unfair. I do not think the government will do this.

What is currently the status of Chinese rare earth processing technology compared to the rest of the world? How advanced is it exactly? Will China require technological assistance from overseas?

Rare earth processing technology in China is highly advanced and can be regarded as filling an important gap in the world. China can supply REE products as pure as 99.9999%, while for example French companies can only produce 99.999% pure products and Japanese firms generally produce 99.9% purity products. In addition to the purity, Chinese technology now uses low energy consumption, creates no pollution, and utilises a zero discharge process. So in terms of rare earths processing technology, China definitely leads the world and is certainly very competitive. I can attest to that myself, being the owner of a few patents in the field of ion exchange technology.        

This article was published in the most recent edition of The China Analyst, January 2010. The China Analyst is a knowledge tool produced by THE BEIJING AXIS for executives with a China agenda. To access The China Analyst, please click here.

www.thebeijingaxis.com

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Rare Earth Metals What happened to SA's RARECO company? Although delisted from the JSE, does it still exist and hold mining rights? by H Potgieter on January 19 2010, 11:24 Find this comment inappropriate? Report it

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