It was not immediately clear how the move would affect supplies and exports of the metals -- a collection of 17 elements that have become vital ingredients in high-tech products ranging from iPods to wind turbines.

But a statement by the State Council, China's Cabinet, indicated tighter regulation that could affect the flow of the resources.

"(We) will impose stricter protective mining policies on rare earth resources and protection standards for the environment," said the statement, issued after a meeting on the issue chaired by Premier Wen Jiabao.

"(We) will set annual rare earth mining and export quotas at reasonable levels, taking into account domestic resources, production and consumption, and the international market."

The measures were aimed at laying a "sustainable and healthy" foundation for the industry, it said. They statement did not give more specific policy details.

Most of the key provisions had already been previously presented by Chinese officials as necessary for the industry.

The statement said under-regulated mining, the resulting ecological damage, and "chaotic" exports had so far "seriously affected" the sector's development.

The plan would also include cracking down on illegal mining activity and pollution and encouraging a consolidation of the industry into fewer and larger players.

China controls more than 90 percent of the world market for rare earths and its moves to tighten control have raised concern overseas that Beijing was abusing its market dominance.

In December, Jon Huntsman, the US ambassador to China, called on Beijing not to use rare earths as a "trade weapon" after Japanese industry said Beijing temporarily cut off exports in 2010 in the midst of a diplomatic row.

Beijing has denied doing so.

China, which has denied any political motivations, has recently stepped up oversight of the elements by cutting quotas for overseas shipments and hiking export taxes.

It insists this is due to environmental concerns and the need for a more sustainable approach to the harvesting of its rare earth deposits.

The land and resources ministry last month said it had brought 11 rare earth mines under state control.

Analysts said the earlier move was a key step towards consolidating the fragmented industry in the south and would likely increase the cost of the elements.

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