Baotou Rare Earth, China's leading producer of rare earth metals, began storing the valuable minerals in April despite lagging government policies, Shanghai Securities News reported.

The company aims to maintain a strategic reserve of 300,000 tons of rare earth concentrates in the next five years, according to a source close to the matter.

The company is also spending 3 billion yuan (439 million US dollars) to add to its stockpile of 80,000 tons of rare earth oxides in a matter of two to three years. The local government will shoulder up some of the financial responsibilities.

Analysts say the company's rare earth oxides reserve will be used to keep international rare earth prices under control, as runaway prices will cause foreign miners to resume mining their own rare earth resources, further hurting China's weak say on international pricing.

However, some domestic experts disagree with the company's plan of storing rare earth oxides, saying such storage is only a need of the company, not that of the state. These experts tend to support the storage of rare earth concentrate, and such a divide within the circle of experts remains to prevent the state's plan from going further.

The state guidelines on rare earth metal reservation, which were approved by the government last year, have failed to produce any details to date.

The company was given a government green light to build a strategic reserve, to secure China's rare earth minerals, which is useful in producing green and high-tech products from hybrid cars to smartphones.