III. Effectively Protecting and Rationally Utilizing Rare Earth Resources

Rare earths, as a non-renewable natural resource, need to be effectively protected andrationally utilized. As part of its drive to ensure the sustainable use of resources, China hasbeen practicing protective exploitation of its rare earth resources for many years.

According to China's Mineral Resources Law promulgated in the 1980s, the state adopts apolicy of planned exploitation with regard to mining areas that are embraced in state plans andare of great value to the national economy and specified minerals for which protectiveexploitation is prescribed by the state. In 1991, China prescribed protective exploitation for ion-absorption rare earth resources, exercising planned, unified control in all related procedures,including mining, dressing, smelting, processing, selling and export. In 2006, China began toexercise total-amount control over the exploitation of rare earths. In 2007, the stateincorporated the production of rare earths into management by mandatory planning. In 2008,the state issued the National Plan for Mineral Resources (2008-2015) to exercise plannedregulation and control, restrictive exploitation, tightened access and comprehensive utilizationfor rare earths and some other specified mineral resources, of which protective exploitation isprescribed by the state. In 2009, the state took back the power for registering, examining andapproving the prospecting and mining of specified minerals, of which protective exploitation isprescribed by the state. In 2011, China adjusted the tax rates on mining of rare earths. Theadjusted new tax rate for light rare earths (including bastnaesite and monazite) is 60 yuan pertonne, and for middle and heavy rare earths (including xenotime and ion-absorption rareearths) is 30 yuan per tonne, much higher than the rates before the adjustment, which rangedfrom 0.4 yuan per tonne to 2 yuan per tonne. The state also established a strategic reservesystem and kept the rare earth reserves in the form of resources and products, designated thefirst 11 rare earth mining areas to be embraced in state plans, and formulated a special planfor key rare earth mining areas. China has tightened control on mining rights and enforced asystem of mining rights allocation plans. In principle, the state has put a moratorium onaccepting new registration applications for rare earth prospecting and mining, and prohibitsexisting mines from expanding their production capacities. The state exercises strict controlover the total rare earth mining and production volumes to reduce resources developmentintensity, slow the depletion of resources, and advance sustainable development.

In recent years, China has launched special campaigns to regulate rare earth mining andproduction, effectively protecting and rationally utilizing rare earth resources in various ways.The state has tightened control of the total volume of rare earth mining and mandatorilyplanned quotas for rare earth production by means of satellite photography, video monitoring,regular inspection, monthly report system, special invoice checking, and opening phone lines toreceive reports concerning violations of related laws and regulations. In pursuance of relatedlaws concerning rare earths, China has cracked down on illegal rare earth mining and miningthat exceeded quotas prescribed by the state, as well as on production activities of rare earthsmelting and separation enterprises that were unplanned or exceeded the state-set quotas.China also has strengthened joint supervision in key rare earth production areas, investigatedand punished rare earth enterprises that conducted mining and production in violation of lawsand regulations, polluted the environment, caused wastes in resources, or did not have thenecessary conditions to ensure production safety, and called to account those enterprises andindividuals responsible for these violations in accordance with the law. The state has re-examined permits for rare earth prospecting and mining, and publicized a list of legitimatemining enterprises. It has also accelerated the formation of a long-term mechanism forregulating the market order and supervision of rare earth mining and production, advancing themerger and reorganization of rare earth enterprises, and phasing out outdated processes andcapacities to realize large-scale and intensive production. By way of special rectificationcampaigns, more than 600 cases of illegal prospecting and mining were investigated andrectified, more than 100 cases were placed on file for further action, and 13 mines and 76smelting and separation enterprises were ordered to cease production for rectification. In thisway, the trend of illegal mining and production has been reversed.

The Chinese government has stressed the comprehensive utilization of rare earth resources.Over the past few years, the state has reinforced research into the geological structure of ion-absorption rare earth mines, advanced the building of "green" mines and comprehensiveutilization demonstration bases, developed environmental-friendly and efficient miningtechnologies to increase the recovery rates of rare earths by a large margin, extended supportto the development of new flotation reagents and ore-dressing equipment to raise the dressingrecovery rates of rare earths, and worked to recover lean ores and tailings. China promotesbalanced utilization of rare earth elements, encourages research into the application of lightrare earth elements, such as lanthanum and cerium, whose reserves are relatively abundant,and expedites the development of technology for reducing or providing substitutes for the useof scarce heavy rare earth elements, such as europium, terbium and dysprosium. The statealso fosters the comprehensive recycling of paragenetic ores of scarce rare earths that aredifficult to recover during the process of ore dressing and smelting, and encourages therecycling of rare earth associated ores, including niobium, tantalum, thorium, strontium,potassium and fluorite.

China gives great support to the development of the circular economy in this field, and workshard for the recovery and utilization of secondary rare earth resources. The state encouragesthe development of special processes, technologies and equipment for the collection,processing, separation and refining of rare earth wastes, supports the building of specializedbases for the recovery and utilization of secondary rare earth resources, including molten saltsafter pyrometallurgy, slag, waste permanent magnet materials and motors, waste NiMHbatteries, waste fluorescent lamps, dead catalysts, used polishing powder, and other wasteelectronic components containing rare earth elements.