Chinalco halts Guangxi rare earth operations after environmental lapses

FILE PHOTO: A security guard stands in position in the headquarters of Aluminum Corp of China (Chinalco) in Beijing, China March 19, 2010. REUTERS/Christina Hu/File Photo

BEIJING (Reuters) - State-owned Aluminum Corp of China, or Chinalco, said on Monday it told its rare earth unit in southern China’s Guangxi region to suspend operations after inspectors found the company breached environmental rules.

A meeting of Chinalco’s leadership team on Monday morning ordered the Guangxi unit to swiftly rectify the problems identified and discipline those responsible, while calling on more than 600 of Chinalco’s subsidiaries to step up their environmental compliance, according to a company statement.

State-run Chinese media reported earlier on Monday that Guangxi Rare Earth, a unit of Chinalco Rare Earth & Metals Co Ltd that is pursuing an initial public offering in Shanghai, had been contaminating water sources.

Inspectors also found it had been carrying out mining activities outside of its permitted areas, with 24 complaints made about the company by members of the public in Guangxi, the reports said.

It is not the first time Chinalco, China’s biggest state-owned aluminum producer, has run afoul of the country’s ever stricter environmental regulations. In May, officials from the company’s Lanzhou branch in the northwestern province of Gansu were disciplined for environmental failures.

China is the world’s biggest producer of rare earths, which are prized for their usage as components in electronic devices including phones and computers.

Separately, China’s Ministry of Ecology and Environment said in a statement dated July 1 that inspectors in another of China’s rare earth hubs, Baotou in Inner Mongolia, had found that mining slag was being dumped illegally.

The quantity and variety of industrial waste being dumped in 12 sand mining pits selected at random by inspectors was described as “shocking” by the ministry, which in May unveiled new measures to crack down on the illegal transportation and dumping of solid waste in China.

Reporting by Tom Daly; Editing by Christian Schmollinger