China has today launched the world’s first exchange for rare-earth metals, at the same time as revealing plans to cut supplies of rare minerals by 20 per cent.

The government said the restrictions, which follow a series of moves to curb the supply of rare earths and metals, are necessary to raise environmental standards across the mining sector and protect limited resources.

However, the news is likely to raise fresh concerns in the US and Europe that China is restricting exports of metals that are crucial to a wide range of electronic and clean technologies, including wind turbines, solar panels and hybrid cars.

US officials last month said they were “deeply troubled” by China’s attempts to restrict exports of rare earths.

China controls around 95 per cent of the world’s rare-earth production, but officials insisted that curbing suppliers by a fifth will be necessary after the government closed a series of mines and smelting facilities which failed to meet new environmental standards.

Chinese officials told China Daily it would shut one third of its 23 mines and half of the 99 smelting companies. The Ministry of Industry and Information Technology said it was keen to improve environmental conditions and help consolidate the industry.

Meanwhile, local media reports revealed 10 major Chinese rare-earth producers, including the country’s largest producer, the Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co, have launched a new trading platform for rare minerals.

The exchange will be located in Baotou, a city in Inner Mongolia, which supplies the majority of China’s rare-earth supply for 17 metals, including dysprosium, neodymium, terbium, europium and yttrium.

The announcement coincides with the start of a rare-earth industry conference in Baotou today, and is likely to help strengthen China’s pricing power for the resources.

In related news, Canadian firm Orbite Aluminae today announced it has successfully extracted the first North American commercial samples of heavy rare-earth oxides and scandium in Quebec.

The news paves the way for Orbite to become the first North American commercial producer of the rare earths, gallium and scandium. The company now aims to produce its own resources by 2014, and expects to offer rare-earth separation services to third parties from next year.

“Orbite’s entry into the global rare-earths market should help to reduce the economic risks associated with the concentration of separation techniques in China,” said Richard Boudreault, president and chief executive officer of Orbite Aluminae.