A catch in green technologies: Dirty mining

Some of the greenest technologies of the age, from electric cars to efficient light bulbs to large wind turbines, are made possible by an unusual group of elements called rare earths. The world’s dependence on these substances is rising fast.

Just one problem: These elements come almost entirely from China, from some of the most environmentally damaging mines in the country, in an industry dominated by criminal gangs.

Western capitals have suddenly grown worried over China’s near monopoly, which gives it a potential stranglehold on technologies of the future. In Washington, Congress is fretting about the U.S. military’s dependence on Chinese rare earths, and has just ordered a study of potential alternatives.

Here in Guyun Village, a small community in southeastern China fringed by lush bamboo groves and banana trees, the environmental damage can be seen in the red-brown scars of barren clay that run down narrow valleys and the dead lands below, where emerald rice fields once grew.

Miners scrape off the topsoil and shovel golden-flecked clay into dirt pits, using acids to extract the rare earths. The acids ultimately wash into streams and rivers, destroying rice paddies and fish farms and tainting water supplies.

On a recent rainy afternoon, Zeng Guohui, a 41-year-old laborer, walked to an abandoned mine where he used to shovel ore, and pointed out still-barren expanses of dirt and mud. The mine exhausted the local deposit of heavy rare earths in three years, but a decade after the mine closed, no one has tried to revive the downstream rice fields.

Small mines producing heavy rare earths like dysprosium and terbium still operate on nearby hills.

“There are constant protests because it damages the farmland — people are always demanding compensation,” Zeng said.

“In many places, the mining is abused,” said Wang Caifeng, the top rare-earths industry regulator at the Ministry of Industry and Information Technology in China. “This has caused great harm to the ecology and environment.”

There are 17 rare-earth elements — some of which, despite the name, are not particularly rare — but two heavy rare earths, dysprosium and terbium, are in especially short supply, mainly because they have emerged as crucial ingredients of green energy products. Tiny quantities of dysprosium can make magnets in electric motors lighter by 90 percent, while terbium can help cut the electricity usage of lights by 80 percent. Dysprosium prices have climbed nearly sevenfold since 2003, to $53 a pound. Terbium prices quadrupled from 2003 to 2008, peaking at $407 a pound, before slumping in the global economic crisis to $205 a pound.

China mines more than 99 percent of the world’s dysprosium and terbium. Most of China’s production comes from about 200 mines here in northern Guangdong and in neighboring Jiangxi province.

China is also the world’s dominant producer of lighter rare earth elements, valuable to a wide range of industries. But these are in less short supply, and the mining more regulated.

Half the heavy rare earth mines have licenses and the other half are illegal, industry executives said. But even the legal mines, like the one where Zeng worked, often pose environmental hazards.

A close-knit group of mainland Chinese gangs with a capacity for murder dominates much of the mining and has ties to local officials, said Stephen G. Vickers, the former head of criminal intelligence for the Hong Kong police who is now the chief executive of International Risk, a global security company.

Zeng defended the industry, saying that he had cousins who owned rare-earth mines and were legitimate businessmen who paid compensation to farmers.

Western users of heavy rare earths say that they have no way of figuring out what proportion of the minerals they buy from China comes from responsibly operated mines. Licensed and illegal mines alike sell to itinerant traders. They buy the valuable material with sacks of cash, then sell it to processing centers in and around Guangzhou that separate the rare earths from each other.

Companies that buy these rare earths, including a few in Japan and the West, turn them into refined metal powders.

“I don’t know if part of that feed, internal in China, came from an illegal mine and went in a legal separator,” said David Kennedy, president, Great Western Technologies, which imports Chinese rare earths and turns them into powders that are sold worldwide.

Smuggling is another issue. Kennedy said that he bought only rare earths covered by Chinese export licenses. But up to half of China’s exports of heavy rare earths leave the country illegally, other industry executives said.