Molycorp’s Mountain Pass Rare Earths Mine Almost Online

With the reopening of Molycorp Inc.’s Mountain Pass, California operation, who knows China could may become one of its buyers given the Asian nation’s deep requirement of the precious rare earth metals. China was forced to slash its production capacity to

China's loss may well be very much the U.S.' gain as American rare earths producer Molycorp, Inc. on Wednesday announced the sequential start-up of its $895-million worth new Project Phoenix rare earth manufacturing facility at its flagship Mountain Pass, California operation, ahead of an April 1 target schedule.

In a statement, Molycorp, Inc. said it has been for several weeks now actively mining at full mine production rate an approximate 2,800 short tonnes of fresh rare earth ore.

"The launch of Project Phoenix's sequential start-up is occurring well ahead of our April 1 deadline, and represents the accomplishment of a critical milestone in our project," said Mark A. Smith, Molycorp president and chief executive officer. "When this new manufacturing facility is complete and running at full capacity, it will be the most technologically advanced, energy efficient and environmentally superior rare earth facility in the world."

Molycorp, Inc. also announced that the mechanical completions of the new Crushing Facility as well as the initial Cracking Facility of the Project Phoenix facility have been achieved. Other operations that will be brought online over the coming months also include the milling and mineral extraction; expanded cracking; impurities removal; rare earth oxide separations; product finishing; and paste tailings processing and storage.

This is great news indeed to a world desperate to get hold of the precious metals, especially since China had also explicitly implied that most of its rare earths production are targeted for domestic consumption.

With the reopening of Molycorp Inc.'s Mountain Pass, California operation, who knows China could become one of its buyers given the Asian nation's deep requirement of the precious rare earth metals. China was forced to slash its production capacity to protect energy resources as well as prevent further serious environmental damage.

"While rare earth prices continue their descent over the near term, we remain optimistic on the long-term outlook for the industry...Outside of Molycorp and Lynas, we do not anticipate that any other producer will commence production before 2015, keeping supply relatively tight. Further, the recent softness in prices should keep demand relatively robust and alleviate substitution concerns," Anthony Young, an analyst, said in www.streetinsider.com.

In 2011, China, the world's stronghold of rare earths as it supplies almost 100 per cent of the global demand, drastically reduced export quotas to keep more of the precious metals for its own wind, solar and battery manufacturers.

China's move prompted non-Chinese manufacturers to scout for alternative materials to aid their respective manufacturing activities that mostly rely on the precious rare earths. Large manufacturing companies in Europe, Japan and the U.S. involved in the automobile industry and wind turbine manufacturing, among others, have been devoting time for research and development to come out with an alternative, and possibly low-cost, to the rare earths they require for their products, which is neodymium. Neodymium is commonly used to manufacture magnets.

Early January this year, Molycorp Inc. reported it had entered into customer supply agreements representing 78 per cent of expected output from the Phase 1 expansion works at the Mountain Pass rare earth mine and oxide manufacturing facility.

The company said 58 per cent of the expected 19,050 metric tonnes under its Phase I production has been allocated toward customer agreements, while some 20 per cent is reserved for producing its water treatment products. Another 6 percent of Phase 1's production is in final discussions with customers, the company added.