SHANGHAI (Reuters) - The rare earths arm of state-owned China Minmetals Corporation said one of its units would halt production with immediate effect from Thursday after failing to rectify a series of environmental offences.
The Ministry of Ecology and Environment found that Ganxian Hongjin Rare Earth Ltd Co, a subsidiary of China Minmetals Rare Earth Co failed to address pollution issues and continued to violate environmental protection laws, the Xinhua news agency said earlier on Thursday.
The company's four extraction plants and three workshops had significant issues with hydrogen chloride and organic waste gasses, Xinhua said, adding that the group was notified of the problems last year.
"The firm adopted a passive attitude and did not adopt any measures to rectify the situation," Xinhua said.
A Minmetals' spokesman said in an emailed statement that it fully accepted the findings of the inspection team. It promised to conduct an immediate investigation to find who was responsible for the violations.
"The company attached high importance to the issues raised," China Minmetals Rare Earth Co said in a filing to the Shenzhen stock exchange, adding that it held a supervision work meeting on Thursday and decided to halt production of its Ganxian unit to ensure the rectification will be in place.
China Minmetals Rare Earth Co. Ltd, is one of China's big six authorised state-owned rare earth producers.
China is responsible for more than 90% of global supplies of rare earths, 17 strategic metals which are used in a range of high-tech applications in renewable energy, consumer electronics and defence equipment.
Beijing began a crackdown on unregulated production a decade ago due to the industry's environmental burden, saying the production of millions of tonnes of waste a year had contaminated water and farmland in Jiangxi and Inner Mongolia.
The country has previously used environmental violations in the rare earth industry to crack down on the entire sector and justify production and export restrictions.
The WTO allows countries to restrict exports and production on environmental grounds.
Minmetals is one of two state firms under scrutiny in a new round of nationwide environmental compliance audits. Xinhua said last week that 130 people had already been reprimanded as part of the investigations.
(Reporting by Engen Tham and Wang Jing; additional reporting by David Stanway and Roxanne Liu in Beijing, Twinnie Siu in Hong Kong; editing by Richard Pullin)