Rare earth mining company Molycorp buying Neo Material
Molycorp Inc., which revived the open-pit rare earths mine about 15 miles south of Primm, will acquire the much larger Neo Material Technologies Inc. for $1.3 billion in stock and cash.
Based in Toronto, Neo Material generated $596.7 million in revenues and $165.4 million in net income during the first three quarters of last year; by contrast, Molycorp had $263.9 million in revenues and $95 million in profits, as it ramped up production at the mine.
Although it has a presence in 10 countries, half of Neo Material's revenues come from China, by far the world's largest rare earths producer. In addition, the company produces rare metals, such as gallium and indium that are used in electronics and cars, as well as magnetic ores.
Rare earths, used in small quantities, strengthen the industrial magnets that form the core of products ranging from guided bombs to smart phones to windmills. They account for the lion's share of sales for both Molycorp and Neo Material.
The announcement of the deal came after the stock market closed. In after-hours trading, Molycorp rose 43 cents a share, or 1.7 percent, to $26.41.
Contact reporter Tim O'Reiley at toreiley@reviewjournal.com or 702-387-5290.
