Smuggling blights rare earths industry

The smuggling of mineral resources out of China, especially rare earths, continues to increase, a senior official from the General Administration of Customs said.

The minerals are mainly smuggled to neighboring countries such as Japan and the Republic of Korea, Chen Jianxin, deputy director of the administration's anti-smuggling bureau, recently told China Daily.

Chen said the huge demand from foreign markets and China's high customs duties for rare earths are the main reasons behind the rise in smuggling.

He declined to disclose the latest statistics on the smuggling, but China's first white paper on the rare earths industry, released by the State Council in June, paints a grim picture.

The report said that in 2011, the amount of rare earths smuggled out of China was 20 percent higher than the amount of products that legally left the country.

According to customs, Chinay exported about 18,600 tons of rare earths products in 2011, accounting for 61 percent of the rare earths export quota of 30,184 metric tons released by the Ministry of Commerce for 2011.

At the same time, more than 21,000 tons were smuggled out, according to the report.

Of the estimated 21,000 tons, only eight cases involving 769 tons of the minerals were detected as part of a campaign to crack down on rare earths smuggling, according to customs.

China holds about 23 percent of the world's rare earths deposits, but accounts for more than 90 percent of the global supply. The term rare earths refers to 17 minerals that are used in high-tech devices such as batteries, wind turbines, cellphones and even missile guidance systems.

Chen said most smuggled rare earths come from Jiangxi province, the Inner Mongolia autonomous region and some coastal areas in South China, which are major rare earths production areas.