Molycorp Expected To Take On Chinese Rare Earth Suppliers

Molycorp, Inc. (NYSE: MCP) is being initiated with an Overweight rating by JP Morgan with a $26.50 price target as it witnesses China's rationing of supplies and raising of rare earth prices has created a supply demand.

Molycorp is expected to be fully operational in late 2012 and be able to produce rare earth oxides for $1.27/lb vs. Chinese producer's ~$2.54/lb, which gives the company a clear cost advantage against the world's largest supplier and the ability to maintain profitability even during period of weaker prices.

Molycorp, Inc. closed yesterday at $19.50.

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