Molycorp Files Claim in Colorado Against M&K Related to Defects in Engineering Services

Molycorp, Inc.'s

Executive VP and General Counsel, John F. Ashburn, Jr., today announced that the Company has filed a claim against M&K Chemical Engineering Consultants, Inc. (“M&K”) and certain current and former officers and owners of M&K in Colorado Federal District Court arising from a commercial dispute over defects in engineering services related to the Company's Project Phoenix modernization and expansion of its Mountain Pass, California, facility. While the Company generally does not comment on active disputes, Mr. Ashburn indicated that, due to the high level of public interest in the Project, he wanted to ensure that the reasons underlying the dispute were clear. Mr. Ashburn said that the claim was filed in an attempt to recover a portion of the costs incurred by the Company in rectifying defective engineering services for which the Company believes the defendants are responsible and that the effects of the defective engineering underlying the claim have already been largely mitigated by the Company's Technology Group and other engineering companies working on the Project. Those defects will not impact the timing of the Company's plans to ramp up production at its Mountain Pass facility, Mr. Ashburn said, and the Company still expects to achieve full Phase 1 production rates by the end of the current quarter as previously announced. Mr. Ashburn noted that, while unfortunate, the claim filed by Molycorp essentially amounts to nothing more than a commercial dispute over monetary damages.