China on Wednesday launched its first physical trading platform led by the country’s largest producer Baotou Steel Rare-Earth Hi-Tech (600111.SH) in an attempt to regulate the sector and strengthen its pricing power for the resources.

The rare earth trading platform is located in Baotou city in Northern China's Inner Mongolia autonomous region, home to more than half of the world's light rare earth output.

Baotou will join nine other firms to invest a total of 100 million yuan ($15.77 million) to start the platform. Each shareholder invested 10 million yuan and holds a 10 percent stake in the exchange, which will increase transparency in prices, according to the Beijing-based sina.com.

Currently, prices in China are published by several independent consultancies and most of the metals have fallen over the past few months due to weaker demand.

China has been insisting that it's unfair to bear the burden of supplying 90 percent of rare-earth demand while only having 23 percent of global reserves, and began to implement stricter environmental standards on mining and refining.

China's Ministry of Industry and Information Technology set both permit and production quotas on rare earth mining and refining on June 13th, and was reported to have been stockpiling rare earth inventories since July 5th.

On Monday, China set up a minimum production threshold for rare-earth producers for the first time