Rare earth experts said at an industry forum that a mechanism should be established to combat illegal rare earth mining and production.

Illegal mining of rare earth ore totaled more than 40,000 tonnes last year, according to statistics released during the fifth China Baotou Rare Earth Industry Forum.

The forum kicked off on Thursday in the city of Baotou in north China's Inner Mongolia Autonomous Region, which accounts for more than half of the world's output of light rare earth metals.

"The domestic and global markets have been glutted with large amounts of illegal rare earth products. This has adversely affected the prices of rare earth products and disturbed industry order," said Ma Pengqi, former president of the Baotou Rare Earth Research Institute.

"For example, in the city of Ganzhou (a major rare earth production center), a resource tax of 36,000 yuan (5,900 US dollars) must be paid for each tonne of ion-absorbed rare earth ore that is mined. Taxes account for about 50 percent of the ore's sale price," said Ma Rongzhang, secretary-general of the China Rare Earth Industry Association.

Illegal mining and production allows mining companies to evade taxes and therefore gain more profits, Ma said.

The government has made some attempts to curtail illegal mining. Fourteen illegal mines were shut down and 14 rare earth smuggling cases involving 400 million yuan (65 million US dollars) were investigated from 2011 to 2012. Over 4 billion yuan has been spent to strengthen environmental protection investigations in the sector.

A campaign to cut down on the illegal exploitation, production and transportation of rare earth metals will take place from Aug. 15 to Nov. 15.

However, campaigns are only effective in the short-term and illegal mining will resurface after the campaign is over, industry experts said, adding that a mechanism should be created to eradicate the illegal rare earth mining and production chain.

Rare earth metal sources should be controlled by authoritized departments and any related responsibilities that fall to local goverments should be specified, they said.

The division of related duties among law enforcement departments, as well as standards of punishment for those found to be conducting illegal mining operations, should be carried out as quickly as possible, they said.