It won't be long before China loosens its grip as the world's stronghold of rare earths as American miner Molycorp announced that operations has already started at its new California rare earths mine.

The announcement, made after markets were closed on Monday, immediately sent shares jumping to more than 5 per cent.

The new Project Phoenix heavy rare earth concentrate facilities at Mountain Pass, California, will produce heavy rare earth concentrate mined right from the location. The freshly mined commodity will then be processed into high-purity, custom-engineered heavy rare earth products in Molycorp's globally integrated production facilities.

Molycorp's Mountain Pass holdsseveral of the scarcer heavy rare earths, including dysprosium, used in making engines for all-electric cars, as well as terbium, europium, and other elements.

With the start-up of the new Project Phoenix facility, Molycorp affirmed it is on schedule to attain its phase 1 target production level of 19,500 tonnes by end of the year.

Once the American rare earths miner reaches full production by middle of 2013, the world may expect to have access to more than twice the amount of rare earths on the market as there is right now, according to www.247wallst.com.

And supply can go further overboard as the company expects to contribute 40,000 tonnes by mid-2013 once its phase 2 production goes online.