Molycorp reports discovery of rare-earth deposit

Molycorp, a rare-earths mining company, this week said it discovered a heavy rare-earth ore deposit on mining claims it owns near its Mountain Pass, Calif., facility, roughly 60 miles from Las Vegas.

In a Regulation FD disclosure statement filed Tuesday with the Securities and Exchange Commission, Molycorp said it must extensively test-drill to determine the deposit's quantity and quality and couldn't assure that the deposit will become proven or probable reserves.

Several news outlets noted that Molycorp also announced the find the same day at a conference in Washington sponsored by the Energy Department, the European Commission and Japan's trade ministry.

In a New York Times article on the find, Molycorp Chief Executive Mark Smith said the deposit's nearness to Nevada may speed production of the heavy rare earths. They may come in as little more than a year from now, he said. The company has mined in the area of the find since 1952, and has regulatory clearance to refine and mine for decades, he said.

Molycorp is spending $531 million to clear away aging machinery used to process mined rock into rare earth powders. When work finishes by the end of 2012, the company has said, the mine will produce 20,000 tons of rare earths a year.

Molycorp said in January that it will spend $250 million more to raise the mine's production capacity to 40,000 tons annually. The move came after China, which controls 97 percent of the world rare earths market, said it would tighten export quotas.

Rare earths are key ingredient in high-tech products ranging from iPads to hybrid cars to laser-guided bombs. They're also a key ingredient in many green energy technologies, including wind-power turbines and compact fluorescent light bulbs.

Molycorp Chief Technology Officer John Burba told Reuters on Tuesday that the Mountain Pass find is the first of four new heavy rare-earth deposits his company is exploring. He added that the exploration of the new Mountain Pass find is mostly preliminary, but that the overall rare-earths grade of the deposit is richer than average, at 4 percent to 6 percent, with high concentrations of terbium, dysprosium, europium and neodymium.

Molycorp shares, which trade on the New York Stock Exchange, have risen 7 percent since Monday. The shares rose 32 cents, or 1 percent, Wednesday to close at $32.26.

Contact reporter Matthew Crowley at mcrowley@reviewjournal.com or 702-383-0304.