Molycorp Announces Filing of Claim in Colorado Federal District Court
Molycorp, Inc.'s (NYSE: MCP) (“Molycorp” or the “Company”) 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.
About Molycorp, Inc.
Molycorp is a leading rare earths and rare metals company, and combines a world-class rare earth resource at Mountain Pass, California, with advanced, high-purity rare earth and rare metal materials processing capabilities. With 26 locations across 11 countries, Molycorp is vertically integrated across the global rare earth mine-to-magnetics supply chain. It produces rare earth magnetic materials as well as a variety of high-purity, custom engineered products from 13 different rare earths (lights and heavies) as well as five rare metals (gallium, indium, rhenium, tantalum and niobium), and the transition metals yttrium and zirconium. Through its Molycorp Magnequench subsidiary, the Company is a leading global producer of neodymium-iron-boron (NdFeB) magnet powders, used to manufacture bonded NdFeB permanent rare earth magnets. Through its joint venture with Daido Steel and Mitsubishi Corporation, Molycorp expects to begin manufacturing next-generation, sintered NdFeB permanent rare earth magnets in early 2013. For more information please visit www.molycorp.com.
Safe Harbor Statements
This release contains forward-looking statements that represent Molycorp's beliefs, projections and predictions about future events or Molycorp's 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 complete its planned capital projects, such as its initial modernization and expansion efforts, including the achievement of an annual production capacity of 19,050 metric tons at its Mountain Pass, California rare earth mine and processing facility, or the Molycorp Mountain Pass facility, which management refers to as Project Phoenix Phase 1, and the second phase capacity expansion plan, which management refers to as Project Phoenix Phase 2, and reach full planned production rates for REO and other planned downstream products, in each case within the projected time frame; and the outcome of disputes with contractors regarding defective engineering services. 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, 2011 and of the Company's Quarterly Reports on Form 10-Q. Any forward-looking statement contained in this release or the Annual Report on Form 10-K or the Quarterly Reports 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.