The environmental costs of unregulated mining and refining were high for many years. In southern China, forested hillsides and emerald rice fields were turned into expanses of toxic mud, as Chinese crime syndicates hired laborers to dig up ore and process it in unlined acid pits.

In northern China, groundwater laced with the industry’s radioactive waste began seeping toward the Yellow River. Thousands of square miles of pasture were closed to grazing because of contamination by radioactive dust from refineries, which was blamed for the deaths of thousands of goats.

Chinese metals syndicates developed an international reputation for murder. One night in 2000, thugs broke into the office of a Hong Kong rare metals trading firm and killed the general manager, slicing his throat with a box cutter. The police tracked the suspected perpetrators to the rare earth mining district of China’s neighboring Guangdong Province, where the police lost their trail.

Starting in 2006, Beijing gradually reduced the quantity of rare earths that could be exported legally. It acted for environmental reasons — leading academics were warning about the industry’s pollution — and to assert control over a key component in multinationals’ supply chains.

But the export limits triggered shortages and a speculative frenzy. Prices for some of the 17 different rare earth metals soared nearly thirtyfold.

Hundreds of illegal mines were dug. Smugglers melted rare earths into steel exports, then melted the steel again overseas to recover the rare earths. An initial police crackdown in 2010 had few lasting results.

I visited one of the mines, then abandoned, in Guangdong Province in 2009, along with other journalists for The New York Times. It was a red-brown clay scar, leaving barren a large swath of a valley otherwise full of lush rice fields.

A year later, when we hiked into another illegal mine, which the Guangdong government had described as closed, we were confronted by thugs who threatened to “carve you up like animals in a slaughterhouse.” Four cars chased our taxi across the fields to the nearest highway entrance.

Wen Jiabao, then the premier of China and a geologist by training who did his master’s degree in rare earths, ordered a nationwide campaign seven weeks later by all Chinese security agencies to break rare earth crime syndicates. Raids, arrests and prosecutions followed. Police officers publicly destroyed illegal mining equipment. The national government seized control of 11 rare earth mining districts from often corrupt local officials.

Still, progress in taming the industry was slow. “Excessive rare earth mining has resulted in landslides, clogged rivers, environmental pollution emergencies and even major accidents and disasters, causing great damage to people’s safety and health and the ecological environment,” China’s cabinet said in a policy paper in June 2012.

Mr. Wen ordered that dozens of licensed companies be consolidated into six companies controlled by the government, often with little or no payment to the owners.

Michael Silver, the chief executive of American Elements, a Los Angeles-based company that manufactures or distributes over 38,000 chemicals, said a rare earths joint venture in which his company held a stake was expropriated without compensation in 2012.