GREENWOOD VILLAGE, Colo.--(BUSINESS WIRE)--Molycorp, Inc. [NYSE: MCP] announced today that 78 percent of its Phase 1 rare earth production from its new Mountain Pass, California manufacturing facility, which comes online in 2012, has now been secured by signed customer agreements or has been committed to production of the Company's XSORBX™ water treatment products.
The company said it has entered into written agreements with customers covering 58% of its Phase I production, and has allocated an additional 20% to production of XSORBX™, for a total of 78% of the 19,050 metric tons of rare earth oxide (REO) equivalent that it intends to produce annually under Phase 1 at its flagship Mountain Pass, California rare earth facility. Exact terms, prices, duration, and products covered by these agreements vary from customer to customer. Another six percent of Phase 1 production is in final stage discussions with customers, the company added.
Molycorp intends to sell its proprietary, cerium-based XSORBX™ water treatment products across four market segments: municipal water treatment, recreational/pool/spa water, industrial wastewater, and drinking water purification. The Company currently is selling XSORBX™ to commercial customers in the municipal wastewater treatment and recreational/pool/spa markets.
“I am very pleased that we have met the Phase 1 off-take allocation target that we set for 2011, and have found a home for more than three-quarters of our Phase 1 production prior to start-up,” said Mark A. Smith, Molycorp’s President and Chief Executive Officer. “In an industry that traditionally has been driven by spot sales, Molycorp continues to break ground by moving customers to stable, secure, long-term supply contracts."
Smith added: "Securing long-term rare earth sales contracts requires the ability to produce and deliver actual product to customers for extensive testing, qualification, and fine tuning so that precise specifications can be met. This process can take many weeks, even months, to complete. I am very pleased with our progress to date in working with our customers to ensure we can serve as a reliable, long-term supplier of these strategic materials."
About Molycorp, Inc.
With offices in the U.S., Europe, and Japan, Molycorp, Inc. is the only U.S.-based company that is fully integrated across the rare earth mine-to-magnets supply chain. In addition to its current production of rare earth oxides at its flagship rare earth mine and processing facility at Mountain Pass, California, the Company produces rare earth metals, rare earth alloys (such as neodymium-iron-boron and samarium-cobalt alloys) and rare metals such as niobium and tantalum. The rare earths and rare metals Molycorp produces are critical inputs in existing and emerging applications including: clean energy technologies, such as hybrid and electric vehicles and wind power turbines; multiple high-tech uses, including fiber optics, lasers and hard disk drives; numerous defense applications, such as guidance and control systems and global positioning systems; advanced water treatment technology for use in industrial, military and outdoor recreation applications; and other technologies. For more information please visit www.molycorp.com.
Safe Harbor Statement Regarding Forward-Looking Statements
This release contains forward-looking statements that represent Molycorp’s beliefs, projections, and predictions about future events or future performance. Forward-looking statements can be identified 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 Molycorp’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: Molycorp’s ability to secure additional capital to implement its business plans; Molycorp’s ability to complete its initial modernization and expansion efforts, including the accelerated start-up of the Mountain Pass facility, which management refers to as Project Phoenix Phase 1, and the second phase capacity expansion plan, which management refer to as Project Phoenix Phase 2, and reach full planned production rates for REOs and other planned downstream products; the final costs of the Project Phoenix Phase 1, including with accelerated start-up of the Mountain Pass facility, and Project Phoenix Phase 2, which may differ from estimated costs; uncertainties associated with Molycorp’s reserve estimates and non-reserve deposit information; uncertainties regarding the results of exploratory drilling programs; uncertainties regarding global supply and demand for rare earths materials; Molycorp’s ability to successfully integrate recently acquired businesses; our ability to enter into additional definitive agreements with our customers and our ability to maintain customer relationships; completion of the formation of the proposed sintered NdFeB rare earth magnet joint venture, which remains subject to the satisfaction of customary closing conditions; the proposed sintered NdFeB rare earth magnet joint venture’s ability to successfully manufacture magnets within its expected timeframe; Molycorp’s ability to maintain appropriate relations with unions and employees; Molycorp’s ability to successfully implement its “mine-to-magnets” strategy; environmental laws, regulations and permits affecting Molycorp’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 Molycorp; and uncertainties associated with unanticipated geological conditions related to mining.
For more information regarding these and other risks and uncertainties that Molycorp may face, see the section entitled “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 and of the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2011. Any forward-looking statement contained in this press release or the Annual Report on Form 10-K or the Quarterly Report on Form 10-Q reflects Molycorp’s current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to Molycorp’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. Molycorp 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.