Molycorp and Hitachi Metals Announce Agreement to Pursue Formation of Joint Ventures to Manufacture Rare Earth Alloys and Magnets in the U.S.

GREENWOOD VILLAGE, Colo.--()--Molycorp, Inc. (NYSE: MCP) and Japan-based Hitachi Metals, Ltd. today jointly announced that they have entered into an agreement regarding the planned formation of joint ventures for the production of rare earth alloys and magnets in the U.S. The ventures would be focused on the manufacture of neodymium-iron-boron (NdFeB) alloys and magnets that are vital to many clean energy, automotive, computer, health care, communications and other technologies.

The parties are expected to sign definitive agreements, which are subject to the satisfaction of certain conditions, for the alloy joint venture by early April 2011. Signing of definitive agreements, subject to the satisfactory conclusion of the feasibility study and other conditions, for the joint venture to produce rare earth magnets would follow later in 2011.

“We look forward to launching these joint ventures for production in the U.S. together with Molycorp, which has long experience and deep expertise in the rare earth industry,” said Nobuhiko Shima, President of NEOMAX Company of Hitachi Metals, Ltd. “As the world’s top manufacturer of NdFeB magnets, we are well positioned to satisfy the growing demand from global customers for these rare earth magnets, and to contribute to an energy efficient society.”

“We are very pleased to have reached agreement in principle with Hitachi Metals, the world's leading manufacturer of rare earth magnets, to launch these joint ventures,” said Mark Smith, Molycorp’s Chief Executive Officer. “These joint ventures are an integral part of Molycorp’s ‘mine-to-magnets’ business plan, and they move our Company and the United States one step closer to realizing the strategic goal of re-establishing a complete rare earth manufacturing supply chain in the U.S.”

About Molycorp, Inc.

Colorado-based Molycorp, Inc. is the only rare earth oxide, or REO, producer in the Western Hemisphere and currently produces approximately 3,000 metric tons of commercial rare earth materials per year. Following the execution of Molycorp's "mine-to-magnets" strategy and the expected completion of its modernization and expansion efforts at its Mountain Pass, California processing facility by the end of 2012, Molycorp expects to produce at a rate of approximately 20,000 metric tons of REO equivalent per year and intends to offer a range of rare earth products, including high-purity oxides, metals, alloys, and permanent magnets.

About Hitachi Metals, Ltd.

Hitachi Metals, Ltd.,{TSE: 5468}, headquartered in Tokyo, Japan, is a materials manufacturer that has gained distinction for its high-quality technology and outstanding development capabilities. Its fiscal 2009 (ended March 31, 2010) consolidated sales was 431 billion yen(US$ 4,641 million). As expressed by the “Material Magic” communications symbol, Hitachi Metals remains true to the path it has taken as a manufacturer based in materials development. Hitachi Metals strives to address the needs of its customers by providing truly original products while contributing to environmental protection.

This press release contains forward-looking statements that represent Molycorp’s (the “Company”) beliefs, projections and predictions about future events or its future performance. You can identify forward-looking statements by terminology such as "may," "will," "would," "could," "should," "expect," "intend," "plan," "anticipate," "believe," "estimate," "predict," "potential," "continue" or the negative of these terms or other similar expressions or phrases. These forward-looking statements are necessarily subjective and involve known and unknown risks, uncertainties and other important factors that could cause the Company’s actual results, performance or achievements or industry results to differ materially from any future results, performance or achievement described in or implied by such statements. Factors that may cause actual results to differ materially from expected results described in forward-looking statements include, but are not limited to: the Company’s ability to successfully conclude the feasibility study and satisfy the other conditions and enter into definitive agreements for the joint ventures; the Company’s ability to secure sufficient capital to implement its business plans; the Company’s ability to complete its modernization and expansion efforts and reach full planned production rates for REOs and other planned downstream products; uncertainties associated with the Company’s reserve estimates and non-reserve deposit information; uncertainties regarding global supply and demand for rare earth materials; the Company’s ability to maintain appropriate relations with unions and employees; the Company’s ability to successfully implement its "mine-to-magnets" strategy; environmental laws, regulations and permits affecting the Company’s business, directly and indirectly, including, among others, those relating to mine reclamation and restoration, climate change, emissions to the air and water and human exposure to hazardous substances used, released or disposed of by the Company; uncertainties associated with unanticipated geological conditions related to mining; and other risks discussed in the Company’s filings with the U.S. Securities and Exchange Commission, including the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2010, which filings are available from the SEC.

Any forward-looking statement you read in this press release reflects the Company’s current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to the Company’s operations, operating results, growth strategy and liquidity. You should not place undue reliance on these forward-looking statements because such statements speak only as to the date when made. The Company assumes no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future, except as otherwise required by applicable law.

Contacts

Molycorp
Media:
Jim Sims, Director of Public Affairs, 303-843-8067, Jim.Sims@Molycorp.com
James McCusker, VP, ICR, Inc., 203-682-8245, James.McCusker@icrinc.com
Investor Relations:
Gary T. Dvorchak, CFA, ICR, Inc., Senior Vice President, 310-954-1123
Gary.Dvorchak@icrinc.com
or
Hitachi Metals:
Kenichi Nishiie, Division Head, Corporate Communication, +81 (3) 5765-4075, hmcc@hitachi-metals.co.jp

Release Summary

MOLYCORP AND HITACHI METALS ANNOUNCE AGREEMENT TO PURSUE FORMATION OF JOINT VENTURES TO MANUFACTURE RARE EARTH ALLOYS AND MAGNETS IN THE U.S.

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Contacts

Molycorp
Media:
Jim Sims, Director of Public Affairs, 303-843-8067, Jim.Sims@Molycorp.com
James McCusker, VP, ICR, Inc., 203-682-8245, James.McCusker@icrinc.com
Investor Relations:
Gary T. Dvorchak, CFA, ICR, Inc., Senior Vice President, 310-954-1123
Gary.Dvorchak@icrinc.com
or
Hitachi Metals:
Kenichi Nishiie, Division Head, Corporate Communication, +81 (3) 5765-4075, hmcc@hitachi-metals.co.jp