The China Rare Earth Industry Association is expected to be launched in May and has already recruited 93 member companies, Wang Caifeng told reporters on the sidelines of an industry forum.

Wang, a former official in the Ministry of Industry and Information Technology, one of the key ministries overseeing the industry, is setting up the group.

"The association must reflect the calls of (Chinese) firms and will take up specific tasks in areas such as rare earth exports and foreign exchanges," she said, adding the group will lead price talks with overseas buyers.

"We will be on the frontline and will cooperate with the government to serve the companies."

China produces more than 95 percent of the world's rare earths, which are critical to manufacturing 21st-century goods from iPods to low-emission cars to wind turbines.

Beijing has moved to tighten controls over the elements by cracking down on heavily polluting producers, cutting quotas for overseas shipments and hiking export taxes.

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

While China has denied halting exports, the United States last week called for Beijing not to use controls over the metals as a "weapon" to serve political interests.

Chinese Commerce Minister Chen Deming, on a visit to Washington earlier this month, denied any political motivation over rare earth exports.

Chen said Beijing was restricting mining due to environmental concerns and that Chinese companies were also affected.

Wang said she believed the export quota for 2011 would not be reduced significantly from this year and would still "be sufficient to meet domestic and international demand".

The quota this year was 30,300 tonnes, down 39 percent from 2009, according to government figures.

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