China has set up a special fund derived from its central government budget in order to develop and upgrade its rare earth sector and support producers hit by weak prices.

According to a press release5 from the Chinese Ministry of Commerce, the fund will be used to help local Chinese governments crack down on illegal exploration and mining, and to assist rare earth companies in upgrading their equipment and becoming more environmentally friendly. It will also be used to research and develop high-tech applications.

Rare earth miners are set to receive a subsidy of 1,000 yuan (US$160) for every tonne of rare earth oxides (REOs) that they produce, while smelters are set to get 1,500 yuan (US$240) per tonne.

The ministry will also offer financial support to help companies upgrade their production facilities and fund their research and development projects.