(Yicai Global) Aug. 16 -- State-owned China Minmetals Rare Earth has suspended production at one of its pollution-making subsidiaries Ganxian Hongjin Rare Earth after the subsidiary postponed rectifying problems and lied to authorities about carrying out correctional work.

A central government environmental inspection team visited Ganxian Hongjin premises to investigate the unit's environmental protection efforts, which alerted Minmetal to the problem, the parent said in a statement yesterday. The probe will aim to find out what went wrong and who was responsible.

The Ministry of Ecology and Environment publicly criticized Ganxian Hongjin on Aug. 14, saying its inspection team had found through on-site assessments that several of the company's workshops had issues with emissions of organic waste gas. The firm also delayed correcting problems, took a passive attitude towards the regulator and even lied during inspections, the ministry said.

Residents of Ganxian, Jiangxi province, made 16 reports to authorities about smells coming from Ganxian Hongjin's industrial park between July 2016 and June last year, and the firm made several promises to local and national authorities to resolve the issues. The MEE found after inspection that the company had taken no such action, it said.

Ganxian Hongjin's primary business is the extraction of rare earths. It produces more than 10 different metal oxides and made CNY44.6 million (USD6.3 million) in net profit last year on CNY276 million in revenue. That contributed almost 30 percent of its parent's total revenue, according to Minmetals' financial report for the period.

Editor: James Boynton