A compiled panorama of the Molycorp Minerals Mountain Pass facility during the groundbreaking for its revamped mining operations on Wednesday. (Al Cuizon/Staff Photographer)

Touring Molycorp

Company will mine critical rare-earth minerals
Andrew Edwards, Staff Writer
Posted: 04/20/2011 05:39:26 PM PDT

MOUNTAIN PASS – Minerals firm Molycorp continued its high-publicity surge into the rare-earth metals trade on Wednesday when the company celebrated the renewal of mining operations at its Mojave Desert mine and $781 million “Project Phoenix” investment.

The project is a gambit that executives and politicians alike said will give the United States a foothold in the marketplace for a set of valuable natural elements with myriad strategic and consumer applications.

“Molycorp is back. We’re going to be a meaningful rare-earth metals supplier in the United States,” Molycorp chief executive Mark A. Smith said at the conclusion of Wednesday’s event.

Although Molycorp called the day’s gathering a “groundbreaking” event, the firm actually resumed its Mountain Pass operations in December. The company brought the mine back into operation after environmental problems – including wastewater spills resulting in contaminated water flowing into the desert – led to the mine’s shutdown in 2002.

On Wednesday, massive off-highway trucks carried tons of “overburden” material away from the open-pit mine where Molycorp executives plan to expand their operations.

Truck drivers delivered the overburden, materials lacking in precious rare-earth ore, to pads where construction crews are set to build a new power plant and ore separation facilities. The planned expansion is part of Molycorp’s “mine to magnets” strategy, which Smith said will involve American facilities in all phases of the work to dig rare-earth minerals from the desert and develop commercially viable components.

Earlier this week, the company announced its $17.5 million purchase of Santoku America, a processing firm with facilities in Arizona.

Molycorp, which has its corporate offices in Greenwood Village, Colo., also has purchased a 90 percent interest in Estonian processor A.S. Silmet and is working toward solidifying a partnership with Hitachi Metals, a Tokyo-based firm that produces magnets for automakers.

Molycorp executives say they will ultimately be able to expand mine output from 3,000 to 4,000 tons to 40,000 tons in mid-2013.

The Mountain Pass mine is North America’s only source for the rare-earth elements, 17 materials including the lanthanide series of elements. The metals have a wide variety of uses in such diverse applications as smart phones, wind power generation and warfare.

The rare-earth element neodymium can be combined with iron and boron to craft magnets employed to generate power for electric vehicles or in massive wind turbines. Another rare-earth metal, samarium, can be alloyed with cobalt to create another magnet used for defense applications, Smith said.

Whether rare-earth minerals are devoted to civilian or military use, the world depends on China for the valuable materials. The vast majority – as much as 97 percent, according to Molycorp – are sourced from Chinese mines.

Beijing has reduced its export quota since 2005, according to data cited in a 2010 U.S. Department of Energy report. Within that document, the “Critical Minerals Strategy,” the agency concludes that the nation faces critical supply risks in the short term for deliveries of five rare-earth minerals, including the neodymium needed for automotive and wind power applications.

Current shortages in other materials are hurting companies needing them for their products, Smith said.

“We’re being contacted by Fortune 100 companies who are worried about where they are going to get the next pound of lanthanum, next pound of cerium,” he said.

Lanthanum is needed to refine fuels, Smith said. Cerium’s industrial applications include glass polishing.

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