China's State Council yesterday issued a national guideline that aims to promote sustainable and healthy development of the country's rare earth industry.

China will take effective measures to strengthen the management over the sector and accelerate transformation of the industry's development in order to protect and properly use rare earth resources, the guideline stated.

The guideline, posted on the central government's website, lists a slew of problems that severely affect the sector's healthy development, including illegal mining, excessively expanding smelting and extracting capacities as well as environmental damage.

Under the guideline the government will strictly regulate industrial access, improve management over output plans, and beef up regulations concerning exports. The government will also expedite the creation and revision of relevant laws and regulations pertaining to the sector's management.

Special campaigns will be launched to crack down on illegal mining activities and excessive production, and greater efforts will be made to combat practices that pollute the environment and damage the ecology. The campaigns will also target illegal exports and smuggling of rare earths, the guideline said.

China implements a quota system for rare earth exports. In a move to further streamline exports, the Ministry of Commerce and the General Administration of Customs yesterday jointly announced the inclusion of rare earth ferroalloys in the export quota system.

The guideline also states China will restructure and optimize the sector through increased mergers. The country will also expand the strategic reserves of rare earth resources and quicken the steps in research and industrialization of key technologies within the industry.

Chinese Premier Wen Jiabao said in February that China will streamline its rare earth industry during the coming five years, highlighting the urgent need to protect the environment and save resources by accelerating industrial upgrading and technological innovation in the sector.

As the world's largest rare earth producer and exporter, China provides more than 90 percent of the global demand, and its reserves account for one third of the world's total.

The guideline also includes efforts to implement orderliness in rare earth exploration, smelting and extracting, and market distribution over the next one to two years.

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