Two to three of China's six rare earth groups are to take the lead in evolving into major deep-processing companies, as the nation promotes efforts to raise the overall quality of its rare earth industry, said Vice-Minister of Industry and Information Technology Wang Jiangping.

"Rare earths are an important strategic resource. They are fundamental materials for updating traditional industries and developing emerging industries."

"The ministry is considering reinforcing the strength of the six rare earth groups, and encouraging them to form two to three deep-processing companies that take a lead in the industry."

China's rare earth industry is on a healthy development track, and the past few years have seen its remarkable progress, but continuous efforts are still required to optimize the industry's structure, and realize high tech-driven development, he said.

Wang made the remarks at the 10th China Baotou Rare Earth Industry Forum, which was held on Monday in Baotou in the Inner Mongolia autonomous region.

The city has taken the lead in upgrading its rare earth industry through enhancing rare earth deep processing and value adding related abilities, having nearly half of China's research facilities on rare earths.

The city's rare earth industrial park concentrates on the application of new rare earth materials, including nanometers, high-polymer, new types of fiber, new graphite and highly purified rare earth metal materials, and more than 85 percent of the city's rare earths are deep processed, rather than just being mined and sold, said Zhang Yuanzhong, a senior official from the city, at the forum.

Wang called on the industry to further develop technologies and applications to meet demand from various sectors, especially those related to high-tech and new materials, in order to promote the nation's overall development.

The ministry is working to ensure that companies that are environmentally friendly and with high productivity will get a greater rare earth output quota allocation, and it is also making efforts to reduce carbon emissions, increase added value in the industry, and crack down on illegal mining, he said.

Rare earths are a group of minerals that have many uses in high-tech sectors such as defense and renewable energy. China is the world's largest rare earth producer and exporter, but the industry is beset by problems including illegal mining, smuggling and its lack of ability to produce high value-added products. The authorities have imposed rare earth output quotas since 2010 to protect the limited resources and reduce the environmental costs of production.

In 2014, China started work to establish six big rare earth groups, as the first step to consolidate the sector's resources and restructure industrial chains, and government policies regarding production quotas and mining permits favor large groups.

The six groups, including North Rare Earth Group and Aluminum Corp of China, are mainly based in major manufacturing areas, such as the Inner Mongolia autonomous region, as well as Jiangxi, Guangdong and Fujian provinces.