Molycorp Says Mountain Pass Plant Begins Ramping to Full Scale Phase 1 Run Rate; Warns for 2013 Sales, Cash Flow
Molycorp (NYSE: MCP) today announced that all key production components of its new state-of-the-art rare earth manufacturing complex in Mountain Pass, California are up and operational and that the facility has begun ramping up to its full-scale "Phase 1" run rate. The Company expects that with an orderly ramp up of production it will reach or exceed its Phase 1 run rate of 19,050 metric tons per year (mt/year) of rare earth oxide equivalent (REO) by mid-year. "Mountain Pass is the world's largest, most technologically advanced, and most environmentally responsible rare earth manufacturing complex ever built, and reaching operational status is a historic event. I am very proud of the work of the entire Molycorp team in achieving this extraordinary milestone," said Molycorp President and Chief Executive Officer Constantine Karayannopoulos. The Mountain Pass complex is designed to be able to allow for expanded production to a "Phase 2" rate of as much as 40,000 mt/year of rare earth oxide equivalent. However, the Company stated that, while most of the equipment necessary to complete Project Phoenix Phase 2 is already on site, the decision to complete Phase 2 construction and start-up will not be made
until market demand, product pricing, capital availability, and financial
returns justify additional increases in production beyond Phase 1.
Company officials said that controlling capital and operating costs continues
to be a top priority. With the combination of the new Phase 1 ramp-up
schedule and current rare earth pricing environment, the Company anticipates
lower than expected revenue and cash flow for 2013, and is evaluating its
capital needs for 2013.