Molycorp will double capacity at mine in Mountain Pass, Calif.

Molycorp, which is restarting operations at the rare earths mine at Mountain Pass, Calif., roughly 60 miles from Las Vegas, announced it would double the mine's previously planned capacity.

In early January, work started on a $531 million project to clear away much of the aging machinery used to process mined rock into rare earth powders, which have applications in products ranging from hybrid cars to cell phones to guided bombs. When work finished by the end of 2012, the mine would have the capability of producing 20,000 tons of rare earths a year.

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

Molycorp also said it registered to sell convertible preferred stock to net $171 million to help finance the construction.

Molycorp has been one of the wildest rides on the stock market over the past six months. It went public on July 29 at $14 a share, then soared as high at $62.80 earlier this month after the Chinese move. The stock then plunged by about one-third after investor fears the price had gone too high, particularly after Toyota announced it was investigating a different type of motor for its hybrids that would not need rare earths.

On Monday, Molycorp shares rose $3.83, or 8.91 percent, to close at $46.82 on the New York Stock Exchange.