Rare-earth mine to resume digging in California

MOUNTAIN PASS, CALIF. -- Molycorp will start digging rare earth ore out of its massive open-pit mine on Monday, the first time since the once-flourishing operation went into hibernation nine years ago.

Molycorp resumed blasting late last year in the 500-foot-open-pit mine, which is out of sight to the millions of motorists passing just a few hundred yards away on Interstate 15, to remove what mining engineers call overburden, the rock and dirt covering ore deposits, in preparation for actual mining.
The overburden was used to level out the hilly terrain, where new facilities are under construction. Diagonal stripes of the ore used to strengthen industrial magnets have now become visible.

During a Thursday tour of the mine 15 miles south of Primm, Molycorp CEO Mark Smith said the fresh ore would be stockpiled until the rest of the new mine facilities are finished. In one of the biggest construction projects planned in the Las Vegas area, the company has budgeted $895 million to revamp, raze and rebuild all of the mine's facilities and operations.

On Wednesday, Molycorp said it has allocated $114 million to cover added costs to move the project's completion date forward by three months. Some work already runs 20 hours a day, in 10-hour shifts divided by two-hour breaks, plant managing director Rocky Smith said. The accelerated timetable calls for completing construction by April, followed by six months of testing leading to full production in a little less than a year.

Not surprisingly, Molycorp's employment has shot up. Three years ago, when it was still a subsidiary of oil giant Chevron, 45 caretakers tended to aging on-site processing plants cover with faded paint or rust.

Molycorp now has 205 permanent workers at the mine, almost all of them carpooling from Las Vegas, about 50 freeway miles north. The company projects the number to grow to 350 or 400 in coming months.

The current construction employment of about 600 is expected to peak at nearly 1,000 in the coming months, as the pace of work accelerates. Many of those workers, Rocky Smith said, commute from Las Vegas but some come in from California's Apple Valley and live in Primm hotels during the week.

Driving the project are surging prices for rare earths, 17 elements that are common but unusual in concentrations high enough to make mining financially worthwhile. Used in minute doses, rare earths allow for the manufacturing of industrial magnets, used in everything from tablet computers to windmills to precision-guided bombs, that are much lighter and stronger than otherwise possible.

China now controls about 97 percent of the rare earths market and has tightened exports to feed its own industries.

Selling just its stockpiled ore, Molycorp booked sales of $125.9 million during the first half of this year, compared with $4.9 million during the same period of 2010.

Ironically, Molycorp executives say that the sharp slump in prices as Chinese production increased in the 1990s, plus an aging plant and environmental problems, turned Mountain Pass into a money-loser after five decades of production that started in 1952.

Mark Smith said tests have proved a rare earths supply of at least 30 years. But with his projections of supply and demand remaining tight, he added, the mine at Mountain Pass has a future.

"We're going to be here for a long, long time," he said.

Contact reporter Tim O'Reiley at
toreiley@reviewjournal.com or 702-387-5290.