Molycorp (MCP) on Tuesday announced the discovery of a heavy rare earth ore deposit in southern California.

Although the company said it still has to do "extensive test drilling to determine the quantity and quality" of the heavy rare earths deposit, its discovery was a welcome development to Molycorp and the U.S. The U.S. is highly dependent on China certain types of rare earth metals.

Rare earths is classified into "light" and "heavy" varieties. They are important to a range of green-energy technologies, such as hybrid-electric vehicles, wind-power turbines, compact and consumer electronics like iPads. Contrary to its name, rare earths are fairly abundant in the earth's crust.

China produces over 90% of the world's light rare earths, and close to 100% of the heavies. But the country has significantly reduced the production and export of the minerals to protect China's resources as well as limit environmental harm caused by mining.

Molycorp estimates it might be begin production of the rare earths sometime next year as it has to seek first regulatory approval from federal authorities.

With Molycorp's foray into selling rare earths, consumers may expect a supply surplus in the next couple of years as well as a reduction in its market prices.

Heavy rare earths currently sell for up to $2,600 a pound.