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China outlined a plan Wednesday to speed up the development of the country's rare-earth industry till 2015, a move analysts say will help maintain rare-earth prices and develop the domestic manufacturing capability of magnets and other products.

The government aims to make full use of domestic rare-earth resources and develop more high-end products made from rare earths, according to a five-year plan for the new materials industry published by the Ministry of Industry and Information Technology yesterday.

Rare earths refer to a collection of 17 minerals widely used in high-tech products, electronics and renewable energy.

The ministry set higher output goals for a range of downstream products that use rare earths. It aims to increase the output capacity for permanent magnet materials used in cell phones and hard discs by 20,000 tons per year and hydrogen-absorbing alloy powder used in high-performance batteries by 15,000 tons a year.

Efforts to develop rare-earth manufacturing will focus on cities including Beijing, Baotou in the Inner Mongolia Autonomous Region and Ganzhou in Jiangxi Province, the ministry said.

Industry analysts said the plan will help maintain rare-earth prices and raise the value of the exports.

"The plan aims at expanding domestic demand and maintaining prices of rare earths, which have dropped sharply since last July due to oversupply," Du

Shuaibing, a rare-earth analyst at

Beijing-based consultancy Baichuan Information, said yesterday.

Though the Ministry of Land and Resources (MLR) capped the country's production of rare earths at 93,800 tons for 2011, Du estimated that the real output reached 150,000 tons last year because of illegal mining.

Du said the plan will benefit domestic rare-earth processors. Share prices of Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co closed up 1.62 percent to 48.18 yuan ($7.66) in Shanghai trading yesterday.

"By developing domestic downstream industries that use rare earths, China can gain more from exporting value-added products instead of exporting raw materials," said Liu Ruixing, an analyst from SunSirs China Commodity Data Group.

However, some experts expressed concerns about the production capacity.

"There is already an overcapacity of low-end permanent magnet materials in China, as most domestic companies lack the core technology to manufacture high-end products," an expert from the Chinese Society of Rare Earths told the Global Times yesterday on condition of anonymity.

"Hydrogen-absorbing alloy powder is mainly used in electric vehicles, but domestic demand for electric vehicles is still low," he said.