This article only represents the author's own views.

Rare earths, a collective name for 17 metallic chemical elements, are widely used in a range of important fields, from defense to communications and machinery. But their scattered nature in the earth's crust means they aren’t easily mined, making them difficult for most countries to make locally.

One such producer, JL Mag Rare-Earth Co. Ltd. (6680.HK; 300748.SZ), launched a second listing in Hong Kong IPO last Friday to complement its existing A-share listing in Shenzhen. It will close the books on the deal this Friday (Jan. 7), raising up to HK$5.06 billion ($650 million), which it will use for building new production bases and expanding its global industrial chain. The company is a state-owned producer of high-performance rare earth permanent magnetic materials. As a supplier of materials used in many high-tech goods, JL Mag has benefited from global trends towards devices that can save energy and reduce emissions. But it also faces risks associated with selling to just a small group of customers. The potential for trade restrictions or sanctions from the west, coupled with weak overall stock market sentiment in Hong Kong, has led the company to price its soon-to-be-listed new H-shares on the conservative side.