The expense of environment restoration of rare earth mines in Ganzhou has reached 3.8 billion yuan, which exceeds the gains made by the rare earth mining enterprises working there, according to information on the microblog of the CCTV Financial Channel.

Ganzhou, a city in east China's Jiangxi province, is one of the major rare earth mining areas in China. For the time being, there are 86 rare earth enterprises above the designated size in Ganzhou.

To date, Ganzhou has restored the environment of depleted mines covering an area of 47.7 square kilometers. Furthermore, the environment of depleted mines over an area of 23.8 square kilometers is currently being restored. 

Rare earth minerals, a valuable resource, are supposed to sell at high prices; instead, rare earth minerals are sold like a cheap commodity in Ganzhou and rare earth mining takes a toll on the environment. 

The gains from selling rare earth minerals cannot even cover the cost of treating the pollution it brings about in the local environment and this will force the rare earth industry to carry out supply-side reform.

Insiders hold that it is due to the illegal mining that the rare earth is sold at such low prices. For them, the legal mining not only disturbs the market order, it also causes huge wasting of rare earth minerals. Currently, the recovery rate in the illegal rare earth mining enterprises is only 5%. 

Due to the big rare earth output from the illegal mining companies, the supply of medium/heavy rare earth minerals will decrease by about 40% in reality if the government cracks down on illegal mining and forces a fall of 50% in the output of illegal mining enterprises, said the insiders. The rapid and big fall in the rare earth supply is expected to cause a fluctuation or even a robust growth in the price of rare earth minerals, insiders predict. 

After several years of serious efforts made to restore the polluted environment around the rare earth mines, the rare earth enterprises in Ganzhou have transformed away their reliance on selling rare earth as the only way of making profits; and instead, they reached a consensus about producing intensive-processing and high added value rare earth products.