The landslide took place at about 3:30 pm Saturday near a village in Cangwu county, a county government spokesman said.
A suspect who had been detained by police for involvement in the illegal mining activities confessed that seven people were buried, the spokesman said.
Local government has dispatched rescuers to search the missing people, he added.
Rare earth metals are vital ingredients for manufacturing an array of sophisticated products, including cell phones, wind turbines, electric car batteries and missiles.
China now produces more than 90 percent of the world's rare earth metals but its rare earth reserves only account for about one-third of the world's total.
The country has suspended the issuance of new licenses for rare earth prospecting and mining, imposed production caps and export quotas, and announced tougher environmental standards for rare earth production in order to control environmental damage and protect the resources.Despite government control, illegal production remains active, seeking profits from surging rare earth prices. Source