A CHINESE mining company is planning to raise $50m (£32m) by floating on London’s alternative investment market (Aim), having chosen the UK over listings in Hong Kong and Canada.
Rare Earths Global announced this morning that it expects to start trading later this month, and said a $50m fundraising would give it a market capitalisation of around $270m.
The listing will give UK investors access to China’s rare earth output, which accounts for 97 per cent of the global total, the company said, adding that it had also seen interest from South Africa, Australia and Canada.
“The price of rare earth metals increased greatly last year due to China changing its policies,” said chief executive Simon Ong.
“China has a quota for how many tonnes of rare earth metals may be exported and is not allowing newcomers to enter the market – but we already have a licence,” he added.
Excess exports from China’s rare earth industry kept prices low for years until August last year, when Beijing imposed tougher export restrictions on domestic producers, driving up global prices.
The export quota for 2011 was set at 30,184 tonnes, down about 40 per cent in just two years, with annual output also capped at 93,800 tonnes.
Ong said the quality of London’s mining analysts had pushed him towards a listing here, having considered several other markets.
“Before we decide to float in London I talked to Toronto and looked at Hong Kong,” he said. “In London there are analysts who know the mining sector very well.”
Rare Earths Global has mandated Charles Stanley Securities as nominated adviser and broker to the company.