The first phase of a green smelting upgrade project officially started operations on Tuesday in Baotou, Inner Mongolia autonomous region.

The project — undertaken by China Northern Rare Earth (Group) High-Tech Co — is said to be the world's largest rare earth raw material production base.

Listed on the Shanghai Stock Exchange in 1997, the company is a subsidiary of Baotou Steel (Group) Corp and China's largest rare earth miner and producer of refined metals.

Launched in April last year, the project aims to replace its outdated production lines with industry-leading process technology, equipment, environmentally friendly solutions and production capabilities, the company said in its announcement.

It will enable the company to flexibly switch between different products depending on customer demand.

The company said it will now begin preparations for the project's second phase based on the first phase of operations and market conditions.

Rare earths are a category of 17 metallic elements in the periodic table that have desirable properties, such as electrical conductivity and magnetism. They are used in a wide variety of applications, including cellphone batteries, computers and wind turbines.

China is the world's main source of rare earth materials. Last year, the country accounted for about 60 percent of global rare earth mining and around 90 percent of processing and refining, according to the International Energy Agency.