BEIJING-- China's rare earth enterprises are busy upgrading production equipment and installing environmental protection systems to meet higher environmental standards set by the country, the China Securities Journal reported on Friday.

The Ministry of Environmental Protection issued a statement in April, saying the country will launch a string of environmental checks for the rare earth industry this year.

The checks include self-checks by rare earth companies, preliminary checks by provincial environmental protection authorities and final checks by the ministry.

Enterprises that fail to pass the final checks may be taken over by the qualified companies, which will encourage companies to meet qualification standards, the newspaper quoted Lin Pinguang, deputy secretary general of Jiangxi Rare Earth Industry Association, as saying.

Recent price hikes in rare earth metals also provides companies with sufficient capital to upgrade their production techniques, Lin said.

However, industry insiders warn that the effects of the environmental protection checks might be weakened as the ministry has not issued detailed penalty rules.

The April statement said local environmental departments will not approve environmental evaluation reports for new projects by companies that cheat or do not pass the checks.

The measure barely poses a threat to those companies that have no plan to expand production or go public, the newspaper quoted industry insiders as saying.

Also, the ministry has yet to standardize pollutant discharge techniques of the rare earth industry. The lack of authoritative instructions may also have an adverse impact on the effects of the checks, according to the newspaper.