China plans to create a strategic heavy rare earth reserve in its effort to protect key resources and ensure supplies for the domestic market.

The plan, if approved by the government, would reduce export volumes and increase rare earth prices.

Large state-owned Chinese companies would begin stockpiling heavy rare earths to build strategic reserves for light rare earths in the China’s Inner Mongolian Autonomous Region.

Heavy rare earths are found in the Fujian, Guangdong and Jiangsu regions of China, while light rare earths are mostly found in Inner Mongolia.

According to the plan, which is expected to be finalised this year, the government will set aside capital to subsidise companies that stockpile heavy rare earths in the country, reports Wall Street Journal.