The Ministry of Environmental Protection has already approved the regulations, which will slash the amount of pollutants that miners of the minerals are allowed to produce, the China Daily said, citing officials.

The report comes as China, which produces more than 95 percent of the world's rare earths, has tightened control over the elements by cutting quotas for overseas shipments and hiking export taxes.

The moves have raised concern overseas that China was abusing its market dominance, but Beijing has insisted the issue is an environmental one.

The new standards -- set to be released in early February -- will cut permissible levels of ammonia nitrogen and also put curbs on radioactive elements and phosphorus, Huang Xiaowei, vice director of the National Engineering Research Centre for Rare Earth Minerals, was quoted as saying.

"The government will allow two or three years for rare earth companies to upgrade their techniques. If they don't meet the standards, the miners will be banned from the industry," Huang said.

The restrictions will likely result in higher production costs and export prices, the report said, citing Niu Jinglu, deputy secretary-general of the Chinese Society of Rare Earths.

The commerce ministry said last month it had slashed rare earth export quotas by about 35 percent for the first six months of this year, but added that did not necessarily mean full-year export quotas would drop that much.

Rare earths are key components in products ranging from flat-screen television panels to hybrid cars and China's curbs on overseas shipments have prompted complaints from foreign high-tech producers.

Japanese industry sources said China temporarily cut off exports last year during a territorial row between Asia's two largest economies.

The United States last month called for Beijing not to use its control over the metals as a "weapon" to serve political interests.

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