and James Regan Reuters Tackling pollution, not freeing up trade, is regarded as the solution to a global shortage of rare earths, the metals that are the building blocks of the 21st century. The United States, Europe and Japan have lodged a formal trade complaint against China, the world's monopoly supplier of rare earths, accusing it of choking exports of the metals, used in advanced technologies from computer screens to hybrid cars. Industry experts say the West and Japan have a strong case to argue before the World Trade Organisation (WTO), but the same experts and environmental groups argue that mere victory on a trade complaint will not be enough to break China's grip. Instead, they say the key to ending China's monopoly is for other nations to help clean up one of mining's dirtiest industries — an industry the United States, once the world's largest supplier, allowed to wither many years ago. China's rare earths refineries, which secured their monopoly by turning out metals at extremely low prices for more than a decade, have poisoned rivers with acid and piled up radioactive waste — an environmental cost that aroused little controversy in developed, consuming nations when metal prices were low. Now that China has squeezed exports and driven up international prices over the past three years — a move it says is needed to clean up its industry and conserve a dwindling resource — the West and Japan have finally cried foul. “The rest of the world basically gave up on rare earths 10 years ago,” said Ian Chalmers, managing director of budding Australian rare earths miner Alkane Resources, one of a band of firms trying to redevelop the industry outside China. He said the turning point came when US rare earths miner Molycorp mothballed its Mountain Pass mine in California in 2002, having four years earlier shut down its separation plant due to problems disposing of waste water. The mine had once accounted for 40 percent of global supplies of rare earths. “The rest of the world was seemingly asleep as China grew to become a goliath in the rare earth industry,” according to a 2010 paper prepared for a US energy security thinktank, the Institute for the Analysis of Global Security. The rest of the world, though, is now waking up, thanks to soaring world prices, with some of the more prized rare earths trading at more than six times their 2009 prices and more than double domestic Chinese prices, data published by another budding Australian miner, Lynas Corp, shows. In 2007, Molycorp restarted Mountain Pass, where it has kicked off a modernization and expansion plan, while budding Australian miners Alkane Resources and Lynas have found investors are once again eager to fund new mines and refineries — provided environmental issues are resolved. “Environmental standards and technology have improved greatly. The industry is capable of operating in a much more environmentally responsible manner now,” said Chalmers of Alkane Resources, which has run a pilot processing plant in Australia since 2008 as it prepares to mine its own lode of rare earths by the middle of the decade. That environmental assurance by the industry, however, have stirred scepticism, despite advances in processing technology and pollution controls since the West ceded control to China. “There is solid evidence from China, the United States and even Malaysia, that the processing of rare earths contaminates the environment and endangers health,” said Ronald McCoy, president of Malaysian Physicians for Social Responsibility. His group has been campaigning to stop Lynas Corp opening a rare earths plant under construction in east Malaysia. __
