GREENWOOD VILLAGE, Colo. & KOBE, Japan--(BUSINESS WIRE)--Molycorp, Inc. (NYSE: MCP) today announced that its wholly owned subsidiary Molycorp Minerals, LLC (Molycorp) has acquired Arizona-based Santoku America, Inc. (SAI), one of the leading producers of high-purity rare earth alloys and metals outside of China, in an all-cash deal for $17.5 million. The transaction closed on Friday, April 15, at a ceremony attended by senior management representatives from Molycorp, SAI, and Japan-based Santoku Corporation, SAI’s former parent company.
The acquisition provides Molycorp with the capability to immediately begin manufacturing and selling rare earth alloys for the production of neodymium iron boron (NdFeB) magnets (used in electric and hybrid cars, advanced wind energy turbines, and many high tech electronics and applications) and samarium cobalt (SmCo) magnets (used in defense and other applications), as well as a variety of other specialty alloys and products. SAI will immediately begin sourcing rare earth feed stocks for production of its products from Molycorp’s Mountain Pass, California rare earth mine and processing facility, making it the first rare earth metal and alloy producer in North America that is not dependent on rare earth materials sourced from China. Based in Tolleson, Arizona, the facility has been producing specialty alloys, including rare earth alloys, for more than 30 years. The employees there are highly experienced and skilled in the production of rare earth and specialty alloys.
The company will change its name from SAI to Molycorp Metals and Alloys, Inc., to better reflect its new U.S. based ownership and its access to one of the world’s richest rare earth ore deposits at Molycorp’s Mountain Pass rare earth mine and processing facility. Additionally, pursuant to the terms of the transaction, Santoku Corporation will provide Molycorp Metals and Alloys, Inc. with technical assistance with respect to the production of rare earth alloys on an ongoing basis and also will act as the exclusive authorized distributor of strip cast NdFeB alloys produced by Molycorp Metals and Alloys, Inc.
“We are very pleased with this acquisition," said Mark A. Smith, President and Chief Executive Officer of Molycorp, Inc. "It further strengthens and expands the excellent relationship Molycorp and Santoku Corporation have enjoyed for many years. It also accelerates our plans to deploy a fully integrated ‘mine-to-magnets’ manufacturing supply chain in the U.S. In addition to working with Santoku Corporation as our distributor of strip cast NdFeB alloys manufactured at the Arizona plant, we also look forward to continuing our supply relationship in support of Santoku’s ongoing alloy manufacturing operations in Japan.”
"The highly experienced SAI team will be a great addition to our rapidly growing Molycorp family, and I am especially pleased that we will be gaining the talents and experience of SAI President Randall Ice in this acquisition," added Smith.
“We at Santoku Corporation are pleased that Molycorp has acquired our U.S. based manufacturing operations and that by selling those operations, we have been able to help Molycorp in creating a fully domestic “mine-to-magnets” manufacturing chain in the U.S.,” said Yusuke Inoue, Chairman of Santoku Corporation.
Media Availability Via Conference Call
Molycorp CEO Mark Smith will speak to members of the news media at a media availability event at the Molycorp Metals and Alloys facility in Tolleson, Arizona (8220 West Harrison Street) at 12:45 p.m. Pacific to discuss this acquisition and its implications. Accredited members of the news media are welcome to attend in person or to participate via conference call-in. Conference call-in numbers are provided below:
|From the US: +1 (323) 417-4600, access code: 689-019-182|
|From the UK: +44 (0) 121 368 0265, access code: 689-019-182|
|From Canada: +1 (416) 900-1162, access code: 689-019-182|
|From Australia: +61 (0) 2 8014 4932, access code: 689-019-182|
|From Germany: +49 (0) 898 7806 6471, 689-019-182|
Colorado-based Molycorp, Inc. is the only REO producer in the Western Hemisphere and currently produces more than 3,000 metric tons of commercial rare earth materials per year. In addition to its rare earth mine and processing facility at Mountain Pass, California, Molycorp also owns a controlling interest in the Estonia-based Molycorp Silmet AS, which has a production capacity of 3,000 metric tons of rare earth products and 700 metric tons of rare metal products annually and is one of the largest rare metal and rare earth metal producers in Europe. Following the execution of Molycorp's "mine-to-magnets" strategy and the expected 2012 completion of Phase 1 of its modernization and expansion efforts at its Mountain Pass, California processing facility, Molycorp expects to produce at a rate of approximately 19,050 metric tons of REO equivalent per year from Mountain Pass. The Company expects to achieve an annual production capacity at Mountain Pass by the end of 2013 of approximately 40,000 metric tons of REO equivalent per year after the completion of Phase 2. Molycorp intends to provide to the market a range of rare earth products, including high-purity oxides, metals, alloys, and permanent magnets. The company currently sells products to customers in Europe, North and South America, Asia, Russia, and other previous Soviet Union countries.
This press release contains forward-looking statements that represent the Company’s 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 effectively assimilate Santoku America, Inc. into its overall operations; the Company’s ability to secure sufficient capital to implement its business plans; the Company’s ability to complete its Phase 1 modernization and expansion efforts and Phase 2 expansion efforts and reach 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 December 31, 2010, which filings are available from the SEC.
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