From next year, foreign and domestic mining companies will be required to pay money into special environmental trust accounts, which will be handed back to the companies once land around the mines is properly restored.

Jiang Jianjun, director of the geological environment department under the Ministry of Land and Resources (MLR), said: "We are mulling a national mine ecological environment protection regulation to be issued next year.

"This will include details of how we intend to protect and restore the natural environment around mines through a special fund."

The amount will be calculated according to the mining company's annual income, and other factors including the cost to restore the natural environment, he said.

The funds will be held in trust in designated banks, with local governments given co-supervisory responsibility with relevant departments.

"The money will be given back after the companies have restored the environment and ecology around their mines," Jiang said on the sidelines of a seminar on mining safety in Beijing.

To date, the system has been set up in 19 provinces and regions, including Qinghai and Tibet.

MLR Vice-Minister Wang Ming said on Tuesday that China will unveil more measures targeting environmental protection at mines and greater energy savings.

China's mining sector has experienced strong growth this year with investment in exploration reaching 316.2 billion yuan ($42.6 billion) in the first nine months.

Investment in processing was 653.3 billion yuan ($88 billion) during that period.

However, the devastation of the ecological environment in some areas has worsened.

MLR data showed that more than 40,000 sq km of land had been destroyed by the end of 2005 because of mining.

Most of the damaged land was intended for agricultural use, 12 percent of which could not be immediately used.

Moreover, open-cut mining had lead to serious losses of water and soil through desertification.

In 2005, a geological prospecting team from Shaanxi Province cut down large patches of mountain forests while illegally digging for gold in two counties in Gansu Province.

MLR is now directly in charge of examining and approving exploration and mining rights for tungsten and rare earth minerals.