BEIJING, Aug. 11 -- China has cut its export quotas for rare earth in 2010 by 40 percent from the levels in 2009, a report by a Chinese newspaper showed on Wednesday, as the government tightens its grip over the industry.

The Ministry of Commerce issued 30,258 tonnes of export quotas as of end-July, some 19,887.1 tonnes less than in 2009, the China Chemical Industry News reported. The paper cited information from an industry conference on Aug. 9 in Baotou, where China's largest rare earth miner is based.

Of the quotas, 22,512 tonnes were assigned to domestic firms while 7,746 tonnes were given to foreign-invested companies, the report said.

China dominates production with 95 percent of global supply of the group of metals, a crucial ingredient in the motor magnets used in hard disk drives, CD ROMS and DVDs and electric cars.

The government wants production to be consolidated to a few state-owned firms as illegal mining and cut-throat competition by small miners has driven down prices and led to environmental pollution.

Leading miners Baotou Steel Rare Earth High-Tech Co and Jiangxi Copper Corp are set to launch a unified pricing mechanism on light rare earth materials nationwide, a move that is expected to give China a bigger say in international markets over the valuable resources, state media said.