China will further tighten controls on rare earths by restricting mining rights to selected state-owned firms, as it seeks to prop up prices and prevent over-exploitation, state media said Wednesday.
A draft plan has been submitted to the State Council, or cabinet, for approval, the China Daily reported.
China supplies at least 95 percent of the world's rare earths - 17 chemical elements essential for the making of iPods, wind farms, electric cars, missiles and a wide range of other products.
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"Once approved, the Ministry of Land and Resources will issue licences and start allocating the resources to those companies," the report cited an unnamed source close to the matter as saying.
Names of the shortlisted companies were not given in the report.
"Private enterprises can only collaborate with the selected firms through shareholding," the source said, according to the paper.
Prices of the metals have risen by a little more than 20 percent from 1979 to an average of 8,500 dollars per tonne in 2009 despite soaring global demand, the report said.
China has been increasingly curbing exports in recent years in a bid to prop up prices, ensure supply for its own needs and create jobs for millions of migrant workers by luring foreign companies to its shores.
The government has capped production of rare earths this year at 89,200 tonnes, up only 8.36 percent from 2009, the newspaper said.
It has also stopped issuing new licences for domestic exploitation until June 30, 2011, the report said.
Previous media reports said the nation was considering even banning the export of certain elements and closing mines.
Foreign companies and governments fear the new rules, if implemented, will deny them access to the much-needed metals, and force manufacturers to shift their plants to China.
