Resources And Environmental Policies Simulation Of China’s Rare Earth Industry

Considered as industrial vitamins, rare earths are important for economic development and national security. China has supplied more than 90% world’s demand of rare earths recent years. The depletion of resources and environmental pollution problems caused by rare earths’ production have become major factors restricting China’s rare earth industrial development. Previous studies mainly used qualitative analysis method to explore the effect of single policy. This paper aimed to explore the mechanism of rare earth resources and environmental system from systems perspective and perform simulation of effects of different resources and environmental policies on sustainable development of rare earth industry in different scenarios. The main research work and contribution of this paper can be concluded as follows:First, the resources and environmental system of rare earth industry was defined and a system dynamics model for this system was built. The system consisted of four subsystems, including rare earths supply, demand, resources depletion and waste discharge. The feedback mechanism among subsystems was defined based on the industrial characteristics. The resource utilization rate had an influence on reserves; resource depletion had constraints on rare earths production; production emissions represented the influence on environment; rare earths’ reserves regulated the supply and demand fluctuations.Second, resources and environmental policies simulation was performed in scenarios of differerent utilization indicators, pollutant emission standards, production control, and strategic reserve regulation from 2014 to 2030. Then the optimal policy mix was proposed: the strategy of rare earths production was limiting the annual heavy rare earths output at 8,950 tons and the output of light rare earths followed the production forecast based on Generalized Weng model; resource utilization rate increased by 10% than current level; high level standard of pollution emissions was adopted and moderate reserve policy was applied. Optimal policy mix simulation result showed that the production of mixed rare earths and Bastnaesite was slowly declining from 2014 to 2030; the output would be 51,330 tons and 25,589 tons in 2030. Reserves were declining. The reserves of ion-based rare earths, mixed rare earths and Bastnaesite were 75, 8200 and 3920 thousand tons. Annual wastewater and air emissions continued to decrease while the production was declining. Wastewater was discharged from 9.93 million cubic meters to 8.45 million cubic meters and waste gas emission decreased from 9.5 billion cubic meters to 8.0 billion cubic meters. The supply of rare earths processing product was slightly more than the demand in 2014 and less in the rest years. The supply of rare earths processing products would be 91,000 tons and demand would be 178,000 tons in 2030. An average annual reserve release would be around 24,000 tons.Third, policy suggestions were provided from the perspective of improving the resource utilization rate, increasing pollutant emission standards, limiting ion-based rare earths production and preparing strategic reserves.