Looking down on the city of Baotou, Inner Mongolia, you can see a large, grey, oval “lake” several kilometres off to the west of the city proper, and 10 or more kilometres to the north of the Yellow River. At 11 square kilometres in size, Baotou Steel Group’s (BSG) tailings pond holds 180 million tonnes of fine waste powder left over from ore processing. It is one of the biggest tailings ponds in the country.
Tailings ponds are dumping sites for waste from the processing of ore, and other industrial refuse. This one also contains more than 9.3 million tonnes of valuable rare earths and metals, mixed in with the waste. Industry valuations of those resources range from 1 trillion yuan (US$160 billion) to as high as 80 trillion yuan (US$12.8 trillion).
But the pond has generated a lot of negative coverage. The media have reported that pollution from the pond has affected at least seven villages and more than 60,000 mu of farmland – 20,000 mu of which is either unusable or less fertile as a result (one mu is around 667 square metres). More than 3,000 villagers have spent the last decade trying to find someone to act on their complaints.
There are also fears over radiation and the possible collapse of the dyke holding back the pond. The pond is seen as a major environmental hazard for the city of Baotou and surroundings areas.
Agreement is easier when it comes to the pollution problem. It is generally accepted that the tailings pond should not have been located here – that this was a mistake made during a troubled period in China’s history.
When BSG was founded in the 1950s, there was no source of water near its mines. Ore processing and smelting plants were instead built several hundred kilometres away, near the Yellow River and on the outskirts of Baotou. BSG’s factories – and the tailings pond – are still here.
According to official figures, the company’s ore-processing plants dump 7 to 8 million tonnes of waste into the pond annually. The site is also used to store the 2.1 million cubic metres of acidic waste-water which BSG’s subsidiary Huamei Rare Earths and the smelting plants produce each year.
It became apparent in the late 1970s that the pond was a source of pollution. Wang Jianying, a professor at Inner Mongolia University of Science and Technology, explains that the pond’s polluted water was seeping down to aquifers and contaminating nearby groundwater.
Farmland near the pond started to fail, with both crops and livestock affected. Today, large swaths of land have been abandoned, and water from the aquifer cannot be used for irrigation or drinking by either local people or their livestock. According to Wang, the pollution is moving towards the Yellow River at a speed of 20 to 30 metres per year.
And alongside the obvious damage to the soil, the Inner Mongolia and Baotou governments, and environmental scientists, are concerned about the risk of the dyke that contains the pond collapsing.
In recent years, tailings dykes have failed in a number of locations around China. With this one lying so close to both Baotou and the Yellow River, a collapse here could be catastrophic. Also, this is an earthquake-prone region.
Rare earths being ignored, but why?
Experts say a shift of focus from processing iron ore to rare earths could help improve efficiency and lower pollution. But BSG is persisting with outdated ore-processing techniques designed to prioritise iron ore, rather than the more valuable rare earths.
A former BSG researcher, who asked not to be named, said the iron ore from the company’s mines contains a high proportion of rare earths. Assuming an annual production rate of 10 million tonnes of steel and a rare earth content of 5% to 6%, some 500,000 to 600,000 tonnes of rare earths could be recovered annually. Current global demand for rare earths is estimated at only 136,000 tonnes.
Since even current techniques produce more than enough to meet market demand, BSG and local government have no incentive to spend more money extracting rare earths from the tailings pond.
Ma Pengqi explains that BSG’s steel-manufacturing operation is huge and requires a constant supply of iron ore. If the company mined less itself, it would have to purchase expensive imported ore, resulting in losses.
“Using its own ore might waste the rare earths, but it’s cheaper than buying in processed ore,” said Ma.
A number of experts pointed out that BSG needs a fundamental change in the way it processes ore. Zhang Xuefeng researches rare-earth pollution and the recycling of mining and smelting waste at Inner Mongolia University of Science and Technology. He wants to see the rare earths extracted first, and then the iron. This will result in higher rates of utilisation of rare earths, more efficient smelting, and lower pollution, he said.
“But actually, BSG is using the least valuable part, and leaving behind the most valuable,” said Zhang.
Publicly available figures show that, at current rates of mining, the rare earths in the iron ore mines of Bayun Obo will be exhausted in about 25 years.
Ma Pengqi pointed out that if the focus was on rare earths, the deposits would last longer and other resources such as niobium, scandium, iron and fluorite could still be extracted.
In 2010, Ma and Zhang Yong, assistant engineer at BSG’s Technology Centre, published details of a new method for utilising tailings, which they called a “closed cascade”. Ma said that, “the new recycling method increases the quality of rare earth concentrate to 60% or more, revolutionising rare-earth production technology and eliminating pollution from the smelting stage.”
But, he added: “We don’t have the facilities needed to put it into practice. Currently it’s just a trial.”
In 2005 and 2006, Xu Guangxian, an academic at the Chinese Academy of Sciences, joined more than 10 well-known academics in presenting a similar proposal to China’s State Council. Despite approval from then premier Wen Jiabao, there is no sign of the proposal being implemented in Baotao.
This article was first published in Caixin’s New Century Weekly.