China has 'paid a big price' for its rare earth industry: government

China is restricting the export of rare earths to protect its environment, said Su Bo, vice-minister of industry and information technology at a news conference in Beijing on Wednesday.

Su released a white paper, Situation and Policies of China's Rare Earth Industry, that catalogued the damage the industry has caused the country. The paper was released by the Information Office of the State Council, or China's cabinet.

"In some places, the excessive rare earth mining has resulted in landslides, clogged rivers, environmental pollution emergencies, and even major accidents and disasters, causing great damage to people's safety and health, and the ecological environment," writes the report's authors.

"Despite its rapid development, China's rare earth industry also faces many problems, for which China has paid a big price."

While China only has 23 percent of the world's rare earth reserves, the country's low product prices has kept other countries out of the market. Last year China produced 96,900 tonnes of rare earth smelting separation products, which accounted for more than 90 percent of the world's total output.

In March the World Trade Organization received a complaint filed by the US, Japan and the European Union that accuse China of unfairly limiting rare earth exports.

Su Bo says any controls used by China are not used to manipulate the market and drive up prices. Rather, the country wants to reign in environmental damage.

"No government in any country would tolerate such severe pollution," said Su, according to a report by China Daily.

Bo noted that the US has 13 percent of the world reserves of rare earth, but has so far failed to exploit them due to high regulatory and environmental hurdles.

Bo also noted that rare earth price increases have been modest compared to other commodities.

"From 2000 to 2010, the price of rare earth products rose by 2.5-fold, while that of gold, copper and iron ore increased by 4.4-, 4.1-, and 4.8-fold during the same period, respectively," writes the report authors.

Image of industrial pollution on the Yangtze by Quiltsalad