China steps up regulation of rare earth industry

China said Monday it has launched an inter-provincial operation to better regulate the production of light rare earth metals in its latest effort to rein in illegal rare earth exploration.

The local governments of three regions where most of China's light rare earth metals exist will jointly crack down on the illegal exploration and production of light rare earths, the Ministry of Land and Resources said in a statement on its website.

The operation aims to "promote the protection and rational development of the country's rare earth resources and further regulate their production," said the ministry.

The three regions include the city of Baotou in northern China's Inner Mongolia Autonomous Region, Jining in eastern China's Shandong Province and Liangzhou in southwestern China's Sichuan Province, according to the statement.

The governments will also cooperate to better plan the development of rare earths and explore the establishment of strategic reserves of rare earth resources and rare earth trade centers, it said.

The move came after an inter-provincial operation launched by China last year to tighten the regulation of medium and heavy rare earth metals production in five provinces and regions in the south.

Rare earth metals are vital ingredients for manufacturing an array of sophisticated products, including cell phones, wind turbines, electric car batteries and missiles.

China now produces more than 90 percent of the world's rare earth metals but its rare earth reserves only account for about one-third of the world's total.

The country has suspended the issuance of new licenses for rare earth prospecting and mining, imposed production caps and export quotas, and announced tougher environmental standards for rare earth production in order to control environmental damage and protect the resources.

Despite government control, illegal production remains active, seeking profits from surging rare earth prices.