As prices keep falling, exports of rare earth-related products from Inner Mongolia increased 36.5 percent year-on-year to 2,664 tons in the first six months, according to local customs.

About half of that went to the United States and about one-third to Japan, up 40 percent and 130 percent, respectively.

But Chen said exports to Japan would be lower than the figure provided by the customs, because China is not the only supplier of rare earths to Japan. Vietnam also exports a large amount of rare metals to the country.

China dropped a longstanding export quota on rare earths in January, and it abandoned its export tariffs on the minerals in April. These measures are expected to keep the prices low and boost overall exports, which are expected to hit 30,000 tons for the whole year, he said.

REHT and China Minmentals Rare Earth Co, two major rare earth extractors of the nation, reported sharp profit declines in their annual financial reports.

Operating revenue of REHT dropped 31.09 percent to 5.84 billion yuan ($949 million) in 2014 and its profits fell by 57.44 percent over the same period.

China Minmentals Rare Earth Co posted a 64.8 percent drop in operating revenue to 702 million yuan and its balance sheet turned from black to red with 55.8 million yuan of losses.

To restructure and consolidate its rare earth market, China integrated bigger companies with dozens of small miners around the end of 2014 and established six major rare earth groups.