A newly released official document, which sets tough emission limits on miners producing rare earths, will force a reshuffle in the industry, Chinese experts and industry insiders said.

The rules, released by China's Ministry of Environment Protection (MEP), will take effect on Oct. 1 this year.

"The rules will drive the small and medium rare earth enterprises out of the industry or to be merged with big players and thus promote the industry consolidation," said Lin Donglu, secretary general of the Chinese Society of Rare Earths.

The rules, for example, set emission cap for ammonia nitrogen content at 25 mg per liter of water for existing rare earths companies during the two years beginning from Jan. 1, 2012, a sharp drop from the current level, which ranges from 300 to 5,000 mg per liter of water, according to the MEP.

The emission level for ammonia nitrogen content will be further reduced to 15 mg per liter for all companies in the industry starting from Jan. 1, 2014.

Liang Xingfang, deputy general manager of Baotou Rewin Rare Earth Metal Materials Co., Ltd. said the new standards were strict, "especially ammonia nitrogen emissions, which places big pressure on firms."

Liang said, technically, it was relatively more difficult for firms to deal with ammonia nitrogen content in water emissions than in gas and sludge emissions.

"The rare earths enterprises which use backward hydrometallurgy and baking technology will have to invest hugely to upgrade their technology," Liang said.

The new standards will help the sustainable development of the rare earth industry in terms of mining, mineral separation and smelting, said Tan Wanli, chief engineer of the Heli Rare Earth Smelting Co., Ltd. in east China's Jiangxi Province.

To small and medium enterprises in the rare earth industry, the new standards will make them suffer and even die out, given their capital and technological limits, Tan said. However, to big firms it can be an opportunity to accelerate development.

Experts said the process of tackling pollution in the rare earth industry is a gradual one, and the MEP should draft a supplementary mechanism concerning rewards and punishment following the introduction of the new standards.

China is the world's largest rare earths producer and exporter, with 90 percent of the world's mined rare earth coming from the country, though its deposits account for one third of the world's total.

The MOC said China exported 35,000 tonnes of rare earths from January to November last year, up 14.5 percent from a year earlier.

Rare earth elements are crucial for the production of components used in a variety of high-tech products such as consumer electronics, but mining them can greatly damage the environment.