China and the world's largest rare earth producer announced Wednesday a first-quarter slump in profits of 72% and a 52% drop in revenues compared to last year.

Inner Mongolia Baotou Steel Rare-Earth Group recorded profits of only $11.2 million (69.4 million yuan) while revenues more than halved to $160 million (1.09 billion yuan).

Baotou said sales volumes and realized prices for its rare earths – use a variety of industries including green technology, defence systems and consumer electronics – were both weak and blamed at least in part March's ruling by the World Trade Organization against China's export quotas.

Xinhua reports an executive from Baotou said "producers were worried that the canceling of regulations on exports would compound the struggling sector with a further price slump."

China's rare earth industry – responsible for almost 90% of global output – imposed strict rare earth export quotas in 2010, ostensibly to curb illegal mining and cut environmental damage.

The industry is also being consolidated under three giant producers led by Baotou, China Minmetals Corporation and the Aluminum Corporation of China.

Worries about the restrictions and China's monopoly of production sent prices for the 17 rare earth elements rocketing from 2008 onwards with some REEs going up in price twenty-fold or more, but prices have now come back to earth with a thud.