TORONTO (miningweekly.com) - China could become a net importer of rare-earth elements as it closes mines to curb pollution and increases consumption, Frontier Rare Earths CEO James Kenny said on Tuesday, ahead of the company’s TSX debut.

Frontier owns the Zandkopsdrift project in South Africa’s Northern Cape, which it aimed to bring into production by the end of 2014.

The company raised C$60-million in its initial public offering, selling 17,65-million units, each one consisting of a share and one-half of a share purchase warrant, for C$3,40 each.

“We’re very happy with support we’ve received,” Kenny told Mining Weekly Online.

“We’ve benefited from a lot of awareness being created in rare-earth element space.”

The stock was trading at C$3,19 a share by 9:59 on Wednesday morning. Frontier shares closed later at C$3,12 apiece.

Rare earth metals have received increasing attention as China cuts export quotas, and after media reports that China stopped selling rare earths to Japan after a diplomatic row. Both countries have since denied this was the case.

Rare-earth elements are used in hybridelectric cars, wind turbines and cellphones, and china supplies over 90% of global demand. The Asian powerhouse has been closing many of its smaller producers as part of its efforts to reduce pollution.

Frontier said Zandkopsdrift was “believed to be one of the largest-known code-compliant rare-earth resources outside of China”.

The company aimed to complete a prefeasibility study on the project by the end of 2011 and a bankable feasibility study by the end of 2012.

“The resource at Zandkopsdrift is large enough to target supplying up to 20 000t/y of rare-earth oxides, which is broadly comparable to the largest non-Chinese rare-earth projects currently under development,” Frontier said in its prospectus.

The company had already met South Africa’s black economic-empowerment targets to have 26% previously disadvantaged ownership by 2014.

A community trust owns 21% of the Zandkopsdrift prospecting right, and former Northern Cape Economic Affairs and Tourism acting head Martin van Zyl owns 5%. Van Zyl had also previously been special adviser to former Northern Cape premier Manne Dipico.

Kenny went on to refute recent claims in the media that the rare earths market was heading for a bubble similar to what happened after the uranium price topped $137/lb in 2007.

“It’s quite different to uranium, which was mainly based on activity in the futures markets, not a shortage of supply,” he said.

Kenny noted a supply shortage was beginning to take shape in the rare earths market, and the earliest new producers outside China were not scheduled to come on stream for at least two years.

Privately held Rareco is also developing a rare earths project in South Africa, which it said earlier this year could be in production by late 2012.

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