The Chinese Ministry of Environmental Protection has announced new regulations which could impact up to one third of the country's rare earth producers.
If the guidelines are enforced, producers guilty of serious breaches of environmental law would be stopped from production and new projects which did not meet standards would not be approved.
Environmental issues in rare earth extraction and refinement have always limited potential sites being developed and illegal mining is still a problem for the Chinese authorities.
The review and inspection of standards is expected to begin in September 2011.