China Minmetals may be planning to launch IPO for rare-earth unit

China Minmetals Corp, the nation's largest metals trader, is reportedly planning to float its China Minmetals Rare Earth unit after prices of the strategic minerals soared on concerns about the country's reduced supply to the global market.

This was reported by the China Business News yesterday, citing an unnamed China Minmetals 'insider', without specifying which stock exchange is being considered. A China Minmetals spokesman was unaware of the source of the report but would not confirm or deny it.

Rare earths are found in many countries but most production takes place in China, where large, economically mineable concentrations are found. The nation accounts for 97 per cent of global supply of the minerals, which are used in the production of electronic goods and electric cars.

Rare-earth extraction in developed nations has dwindled in the past decade following environmental concerns and rising production costs. About 2,000 tonnes of waste is created to take out each tonne of ore, according to a report by credit ratings agency Moody's Investors Service.

Prices of eight rare-earth oxides have soared between 31 per cent and 1,018 per cent in the past five years and the rise so far this year ranges from 4.3 per cent to 348 per cent, according to Thomson Reuters data.

The price gains were particularly steep in the past two months after China announced cutting the export quota for the second half by 72 per cent and a diplomatic row between Japan and China in which Tokyo accused Beijing of halting shipments to gain political advantage. China said the cut in quota was aimed at controlling disorderly mining and therefore reducing wastes and pollution.