China has worked on tougher regulations for rare earth minerals by setting stricter emission limits on miners, which 60 per cent of the local industry would struggle to meet.

These fresh regulations are released to set higher standards for access to the rare earths industry, accelerate the shift of development mode of this industry, facilitate its restructuring, and promote its sustained and healthy development, according to a leading official from the China's Ministry of Environmental Protection.

The newly released regulations would go into effect as of October 1, 2011, the ministry said in a statement.

The caps on about 15 pollutants will apply to all industry players including miners and smelters of rare earth alloys, the Ministry of Environmental Protection said Monday.

Until now China has had lax restrictions on emissions in the rare earth industry and therefore pollutants generated by the sector had not been effectively controlled.

Ministry of Environmental Protection sought to develop emission standard for pollutants from rare earths industry, for the purpose of solving problems in this industry, upgrading the mining, smelting and application technologies, and protecting the precious earth earths with strategic importance, the statement said.

The official said that after the emission standard goes into effect, new enterprises have to strictly enforce the standard. A two-year grace period is provided for existing enterprises in this industry, considering their practical conditions. After the grace period, they should also be subject to the same emission limits as those for new enterprises, it added.

In December, the United States called on China not to use rare earths as a trade weapon after Japanese industry said Beijing temporarily cut off exports in 2010 amid a territorial row.

China suspended exports of rare-earth elements to Japan as an apparent protest to the arrest of a Chinese skipper in early September, following his boat's collision with Japanese coastguard vessels off disputed islets in the East China Sea. Beijing said it re-stared exports in late September, but Japanese traders said shipments resumed only very slowly.

However, recently Japan has announced that it plans to spend $1.34 billion to curb Japan's dependence on rare-earth imports from China by a third.

According to the US Geological Survey's Mineral Commodities Summary, China produces approximately 97 per cent of the world's rare earth. Of the 124,000 tonnes of ore mined in the year 2009, China produced 120,000 tonnes.

China mines about 90 percent of the world's rare earth minerals - which is a collection of seventeen chemical elements and is used to various technological devices, cellular phones, high performance batteries, flat screen televisions, green energy technology, and are critical to the future of hybrid and electric cars, high-tech military applications and superconductors and fiber-optic communication systems.

China has been reducing export quotas of rare earth minerals for the past few years, citing environmental concerns. China's monopoly of the rare earths market has allowed it to manipulate the market by restricting production, using export quotas to limit global supply, and increasing taxes on rare earth metals.