If there is any time for a rare earth miner to raise money, it's now. Typical resources are extremely hot at the moment, making some investors think they are overvalued. Instead of playing that market, they look downstream to the lesser-known set of minerals.
At the moment, China produces about 95 per cent of the 130,000 tonnes of rare earth metals consumed every year. But Canadian companies are trying to change that, developing more projects as China cuts back on its exports. And, China has been finicky with Japan, cutting off rare earth exports to its neighbour after Japan detained a Chinese fishing boat captain this fall.
Rare earth miners say their minerals are the next big thing because they are used in many green technologies, such as wind turbines and fluorescent light bulbs. They are also important for high-tech products like computer hard drives.
As the 'green' economy expands, these companies are trying to take advantage of what they believe will be growing demand for these minerals. Rare Element Resources Ltd. is the latest example. The company is in the market with a $50-million best efforts offering of common shares co-led by Byron Securities and GMP Securities.
Earlier this fall, Frontier Rare Earths Ltd. raised $61-million in an initial public offering. That deal came at $3.40 and was led by CIBC World Markets.
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Tim Kiladze