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Rare Earths Global to depart AIM after torrid two years

Published: 04:33 16 Apr 2014 EDT

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Rare Earths Global (LON:REG) halved in value on its intention to de-list from AIM just two years after joining the junior market.

Rare Earths was valued at £157mln when it originally listed in March 2012 at 247p, but after the fall today its market value has dropped to £13.5mln.

The company blamed Chinese attempts to get a grip on the mining of rare earths in the country for its decision.

China accounts for more than 90% of all rare earths production, most of which is illegally produced and distributed.

To control this, the government introduced a minimum requirement of 2,000 tonnes annually for smelters and 20,000 tonnes per year production for mines to reduce the number participants in the market.

Rare Earth’s smelting and separation plant in China has a maximum production capacity of 800 tonnes and did not meet the new criteria.

It has tried to get additional production and export quotas to remedy the situation, but this has taken longer than anticipated and the plant remains inactive.

Costs are being cut to preserve cash and that includes the cost of the AIM listing, Rare Earths said.

The company’s directors, who own 73% of the shares, intend to vote in favour of the delisting.

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