China will launch its first spot trading platform for rare earths on August 8, State media reported, in the country's latest effort to improve price discovery and regulate the market better.

The platform, led by China's largest producer Baotou Steel Rare-Earth Hi Tech, will only allow physical trading, Shanghai Securities News said, without citing sources.

China accounts for more than 95 percent of the global output of rare earths, a group of 17 minerals used in the electronics, defence and renewable energy industries.

But the government has cracked down on illegal mining, imposed strict production caps and set export quotas, saying that excessive production over the last decade has severely depleted its reserves, damaged its environment and dragged prices down to artificially low levels.

Despite a 30,184-ton-export quota in 2011, the country says it shipped a total of 18,600 tons last year.

The government has said the quota will remain steady in 2012.

China recently set up a rare -earth industry association and is also launching a national strategic rare-earth reserve to give it more say over the way the materials are priced.

• [Editor:editor]