Molycorp enters agreement to manufacture industrial magnets

In keeping with its strategy of selling more than the rare earth ores it mines, Molycorp has entered a joint venture with two Japanese companies to manufacture industrial magnets.

The terms call for the joint venture to be owned approximately one-third each by Molycorp, Daido Steel Co. and Mitsubishi, with each making unspecified capital investments. The Japanese government will add an unspecified subsidy.

The venture will license a design for a neodymium-iron-boron magnet from another Japanese company to avoid the complications and expense of using other magnets. The magnets are key components of motors used in electric-vehicle power trains, hybrid vehicles and wind power generators. They're also key components in motors for home appliances and industrial applications.

News of the deal and an overall stock rally sent shares of Molycorp up Monday. They rose $3.67, or 13.6 percent, to close at $30.65 on the New York Stock Exchange.

Molycorp's flagship property is the open-pit mine at Mountain Pass, Calif., about 15 miles south of Primm.