Chinese industrial executives say the world’s supply of rare earth minerals will outstrip demand within five years, ending reliance on China’s exports.

Wang Hongquain, general manager of China Nonferrous Metal Industry’s Foreign Engineering and Construction Company (NFC), told China Daily more nations with large rare-earth deposits will resume exploration, which will lead to a global reallocation of the minerals.

China produced 118,900 tons of rare-earths last year, more than 30% higher than its planned quota.

Chen Zhandeng, director of the academic department of the Chinese Society of Rare Earths, predicted the country’s export quota will be reduced to only 30,000 tons, after shipping 35,000 last year.

While China only controls 36% of the world’s deposits, countries with large reserves, such as the U.S. and Australia, have yet to unfreeze exploration of the minerals.

Chinese authorities from mining companies and related groups met this week at a meeting authorized by the State Council to discuss environmental protection, industry consolidation and the regulation of rare earth mining and exports, official state news agency Xinhua reported.

The meeting stressed the use of more effort to implement a guideline issued by the State Council last month to promote the healthy development of the country’s rare earth industry.

Late in May, China’s Minister of Land and Resources Xu Shaoshi revealed government plans to maintain tight control over the rare earth sector. The first of its kind in more than a decade, the guideline is designed to enhance industrial consolidation, crack down on smuggling and illegal mining practices, and set up a national strategic stockpile system for heavy rare earth metals.

At the time, the State Council said it would let the three largest companies control 80% of the heavy rare earths in the south of the country within two years. Minmetals is expected to be one of the three conglomerates. China Daily said the other two companies might be Chinalco and Ganzhou Rare Earth Co. Chinalco already has rare earth smelting capacity as well as rare-earth mining and smelting joint ventures in Guangxi Zhuang autonomous province and the provinces of Jiangxi and Guangdong in southern China.

Last week Chinalco took a 45% stake in a rare-earth joint venture in Jiangsu province.

Ganzhou Rare Earth holds most of the rare earths mining licenses in Jiangxi Province, the nation’s largest producer of ion-absorbed rare earths and home to about 40% of China’s reserves.

The Inner Mongolia autonomous region, the world’s largest rare earth producer, recently drafted a plan to concentrate all its rare-earth resources under Baotou Steel Rare-Earth. Twenty-two companies licensed by local governments in the region will be shut down and receive compensation from Batou Steel Rare-Earth. The remaining nine, which are illegal, will be closed without compensation.

Baotou Steel Rare- Earth will also set up China’s first rare earths products exchange and will trade only spot products.

The company is also expected to consolidate companies from Fujian and Jiangxi Provinces, which are rich in heavy rare-earth metals.

Meanwhile, Mark Watts, online news editor for the publication Industrial Minerals, said heavy rare earths prices have surged since the start of the month after the Chinese government made its announcement.

Industrial Minerals reported Thursday that the price of heavy rare earth elements has more than doubled over the last two weeks. Dysprosium oxide, used in plasma TVs, smart phones and energy saving light bulbs, has increased 142% to US$3,400kg.

Editor Mike O’Driscoll said the lack of alternative REE supply outside of China, coupled with a forecast of a 48% increase in world REE demand to 185,000 tons in 2015 and shortages of dysprosium and neodymium, have contributed to the rapid price increases.