The government will impose stricter mining policies and environmental standards for rare earths and set "reasonable" annual production and export quotas to further regulate the crucial sector, the State Council said on Wednesday.

Rare earth metals are comprised of 17 minerals and some are used in high-tech industries ranging from hybrid cars to missiles. China produces more than 95 percent of the world's total supply although it has only about 30 percent of global reserves.

Zhang Anwen, deputy secretary-general of the Chinese Society of Rare Earths, said the measures aim to protect the environment for the industry's sustainable development.

Rare earths are usually discovered in poor regions where the ecological environment is fragile. China has implemented industry guidelines to combat illegal mining and cut export quotas since 2006.

In 2010, China reduced export quotas by 30-40 percent, according to the Ministry of Commerce, sparking complaints from importing countries such as Japan and the United States.

Some countries have threatened to take the case to the World Trade Organization.

In December, the ministry publicized this year's first batch of export quotas, 14,446 tons - an 11-percent decrease from the corresponding figure for last year.