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Rare Element jumps 28 pct on takeover speculation
October 18, 2010 / 7:48 PM / in 7 years

Rare Element jumps 28 pct on takeover speculation

* Shares up over 320 pct in 90-day period on TSX Venture

* Rare earth mines in U.S. eyed for takeover, investment

TORONTO, Oct 18 (Reuters) - Shares in junior miner Rare Element Resources RES.V were up as much as 28 percent on Monday, as buzz around the sector continued to boost miners with rare earth properties in the United States.

The Vancouver-based miner, which owns the Bear Lodge property in Wyoming, has seen its shares soar over 320 percent in the past 90 days.

Analysts see the company as a prime takeover target, as the U.S. government looks to secure a domestic supply of the metals -- including cerium, lanthanum, neodymium, and praseodymium -- which are used in products ranging from lasers and ceramics to wind turbines and computers.

Currently, over 90 percent of the global supply of rare earth minerals is mined and processed in China.

Beijing recently clamped down on exports, reducing quotas by 70 percent for the second half of 2010.

In September, China made political waves by blocking all rare earth exports to Japan, as the two nations were caught up in a spat after a Chinese fishing boat collided with an Japanese coast guard vessel.

Legislation has been introduced in the U.S. Senate and the House of Representatives to increase investment and production of rare earths in the United States.

Earlier on Monday, trading and mining giant Glencore International [GLEN.UL] said it would develop a rare earth and iron ore project with Wings Enterprises.

Shares in Rare Element Resources were up 26.8 percent on Monday at C$9.70 on the TSX Venture Exchange.

Meanwhile, Colorado-based Molycorp MCP.N, which owns the Mountain Pass rare earth mine in California, was up 11.33 percent at $31.45 on the New York Stock Exchange.

$1=$1.01 Canadian Reporting by Julie Gordon; editing by Rob Wilson

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