Will China's Need To 'Go Green,' Affect The Rare Earth Market?
China's pollution problems are well documented, and the government has started to show a desire to act on them. The Chinese control 97 percent of the rare earth supply, which is needed for numerous sustainable energy technologies. China could be in the driver's seat of a new green economy selling not only rare earths, but finished sustainable energy technology.
By Michael Montgomery—Exclusive to Rare Earth Investing NewsThe economic rise of China and its burgeoning urbanized middle class means that the nation of over 1 billion people will face serious challenges unlike any other country. The main problem is pollution. China just passed the United States as the world top energy consumer. This hasn't been the biggest concern for the Chinese, however, as the population grows wealthier and its drive for resources grows, the pollution problem can no longer be overlooked. The mining and energy sectors of the Chinese economy have been able to produce under very little regulations, making Beijing one of the most polluted cities in the world. The runoff from mining operations, from coal to rare earths, has destroyed the water table. “Almost a quarter of China's surface water remains so polluted that it is unfit even for industrial use, while less than half of total supplies are drinkable,” reported David Stanway, for Reuters. China controls over 97 percent of the worlds rare earth supply. These various metals are used in hybrid car technology, as well as the magnets and other materials used in wind and renewable electrical generation technology. China can no longer claim that as a developing nation it should be exempt from regulating its industries and cleaning up its environmental impacts. In regard to rare earth mining, China is considering consolidation of the various mining companies into four or five conglomerates. “Beijing wants to consolidate the industry and lower energy waste and environmental damage. Ironically, the rare earth mining business is one of the most energy-wasteful and highly polluting industries around. Think Chinese coal mining with acid,” stated Paul Denlinger, for Forbes. By lowering export quotas on rare earths by 72 percent, China is hoping to encourage investment and production of wind and solar power. If this plays out, China will be in the driver seat for a green energy sector that is set to explode.