The project in Jianghua county is expected to begin production in February 2020, with estimated output of 1,800 tonnes a year of rare earth oxides, China Minmetals told Reuters by email.
The deposit has ore reserves of 104,300 tonnes, according to the company website.
Prices of rare earths, a group of 17 elements used in a wide-range of products from lasers and military equipment to consumer electronics, have hit multi-year highs following a flurry of reports that Beijing could use them in its trade war against Washington.
Rare earth exports by China, which supplied 80% of imports by the United States from 2014 to 2017, fell 16% in May from a month earlier.
China Minmetals Rare Earth, a subsidiary of state-backed China Minmetals Corp, produced 4,101 tonnes of rare earth oxides in 2018, up 19% from a year earlier, according to a company filing to the Shenzhen Stock Exchange.
Shares in China Minmetals Rare Earth rose 10% to 16.87 yuan on Tuesday, a near two-week high.
(Reporting by Muyu Xu and Shivani Singh; editing by Richard Pullin)