New rare earth metals firm to list in London next year, would be second only to China in scale

Greenland Minerals and Energy says it has access to what are probably the world's largest rare earth metal deposits.

LONDON (Reuters) - 

Greenland Minerals and Energy, with access to what it says are probably the world's largest deposits of rare earth metals and uranium plans to list in London next year, the company told Reuters on Tuesday.

Roderick McIllree, managing director at the Perth-based firm, said UK-based Evolution Securities had been appointed corporate advisor and broker to help with a London Stock Exchange listing, which he said was 6 months away.

"The economic and strategic significance of the resource at Kvanefjeld is only just starting to be understood. This is an orebody that is showing indications of being approximately 40 square kilometres of mineralised material," McIllree said.

"Global consumption of rare earth metals has been steadily increasing and supply has tightened dramatically."

Greenland Minerals (GGG.AX) is already listed in Australia. It last traded at A$0.46, down from above A$0.65 on September 7, but up from around A$0.30 in July.

Before the company makes its debut in London, Denmark has to hand back to Greenland, ownership of the country's resources.

The laws allowing Greenland to take ownership of its oil, gas and minerals from Denmark were passed on June 21, 2009 with the settlement date being January 1, 2010.

Another issue needing to be resolved is an ownership dispute with joint venture partner UK-based Westrip.

"This matter is currently before the courts and we expect it to be resolved satisfactorily in coming months," McIllree said.

"I can confirm that Westrip is in discussion with Greenland Minerals and Energy, but as yet no resolution has been reached," a spokesman for Westrip said.

NUCLEAR TO RECHARGEABLE

Uranium is the fuel used to create nuclear energy. There are currently more than 430 nuclear power reactors in 30 countries. In addition there are about 50 reactors under construction around the world with another 135 on drawing boards.

"Uranium will pay for all infrastructure and costs of mining at the site and allow for the production of the rare earths and zinc at a negative cost,"McIllree said.

"This mine has the potential to supply around 25%of the world's demand for rare earths. This would see Kvanefjeld emerge as the world's single largest producer of rare earths outside China."

Rare earth metals have become important in recent years with the development of new technology. Lanthanum for example is used to make rechargeable batteries for hybrid cars and neodymium is used to make magnetic motors for hybrid cars and cameras.

"Most people are now familiar with hybrid vehicles, rechargeable batteries, mobile (cell) phones, plasma and LCD screens, laptop computers, disk drives and catalytic converters," said McIllree.

"But it is not widely known that these products ... are dependent on the unique properties of rare earth metals."

Global consumption of rare earths was estimated at 135,000 tonnes or about $1.5 to $2.0 billion in 2008. Over the last 10 years demand for rare earths is said to have grown by between 8 to 12% per annum.

Demand is forecast to grow 65% by 2012 from 2008 levels, according to industry estimates. China is said to supply more than 90% of rare earths and is thought to consume about 60%.

"In recent years the Chinese have steadily reduced export quotas, and increased export taxes, recognising that rare earths represent a strategic commodity group," McIllree said.

"The rare earth landscape is at a point of radical change. China is turning its priority from supplying the world, to supplying the burgeoning demand from internal industries."

 (Editing by Veronica Brown)

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