Australian mining company Lynas Corp. is building a $230 million rare earth refinery in Malaysia, the first processing plant to be built outside of China in nearly three decades, The New York Times reports.

Lynas said it expects the refinery, when complete, to meet nearly one-third of the world's demand -- excluding China's -- for the minerals within two years.

That could help to break China's dominance of the market in rare earths -- a collective term for 17 minerals used to manufacture such products as wind turbines, batteries for hybrid and electric cars, flat-screen monitors, missile guidance systems and mobile phones.

China supplies more than 90 percent of the global supply of rare earths, although its reserves represent one-third of the global total. But China's tightening grip on the minerals has raised concern among foreign markets over security of supplies.

China announced Wednesday that it would more tightly control exploration of rare earths in North China, China Daily newspaper reports. Already, China has slashed quotas on 2011 first-half exports of the minerals by about 35 percent, following an earlier decision to cut export quotas by 72 percent for the second half of 2010.

At current rare earth prices, the Lynas refinery is expected to generate $1.7 billion worth of exports, nearly 1 percent of the Malaysian economy, starting late in 2012.

Lynas plans to ship the slightly radioactive ore to Malaysia from the company's Mount Weld mine in Western Australia.

The company's executive chairman, Nicholas Curtis, says a comparable refinery in Australia would cost four times as much to build and operate than in Malaysia.

Malaysia granted approval for the Lynas project after a governmental inter-agency review indicated that levels of radioactivity from the imported ore and its subsequent waste would be manageable and safe, said Raja Dato Abdul Aziz bin Raja Adnan, the director general of the Malaysian Atomic Energy Licensing Board.

Refining of rare earths can leave behind thousands of tons of low-level radioactive waste, as Malaysia has already experienced.

"We have learned we shouldn't give anybody a free hand," Raja Adnan said of the government's trepidation, after a rare earth refinery in the country operated by Japan's Mitsubishi Chemical ended up becoming one of Asia's largest radioactive waste cleanup sites.

Curtis said the ore that Lynas will import from Australia is much less radioactive than that used in the Mitsubishi plant, which he said "never should have been built." Yet the long-term storage of the refinery's radioactive thorium waste is still unresolved, the Times says.