Molycorp Inc’s wholly owned subsidiary acquires 90 per cent of Estonia’s rare earth processing firm

US based Molycorp Inc’s wholly owned subsidiary, Molycorp Minerals LLC, has completed the acquisition of a 90.023% controlling stake in AS Silmet. AS Silmet is one of only two rare earth processing facilities in Europe and the transaction is for approximately $89 million.

Molycorp acquired 80% of the outstanding shares of AS Silmet from AS Silmet Group, which will retain a 9.977% ownership interest going forward. Molycorp acquired the other 10.023% from Treibacher Industrie AG. The acquisition provides Molycorp with its first European base of operations as well as doubles the company's current rare earth production capacity from approximately 3,000 tons per year of rare earth oxide (REO) equivalent to 6,000 tons.
 
Mark A. Smith, President and CEO of Molycorp Inc, said the acquisition provides Molycorp with a European base of operations as well as a larger global customer base, greater rare earth production capacity, and an expanded product line that extends the firm’s interests into other strategic metals and technologies.
 
Smith stated that Molycorp has already begun shipping feed stocks from Mountain Pass to be processed into finished products at AS Molycorp Silmet. In the short-term, this will greatly increase Molycorp’s ability to supply its products into the increasingly tight global rare earth market and provide a convenient base from which to supply European customers, said Smith.

AS Silmet will immediately begin sourcing rare earth feed stocks for production of its products from Molycorp's Mountain Pass, California rare earth mine and processing facility, making it the first rare earth oxide and metal producer in Europe that is not dependent on rare earth materials sourced from China. As part of the transaction, the company also will change its name to AS Molycorp Silmet.

The facility's main focus will be on the production of rare earth oxides and metals -- including didymium metal, a critical component in the manufacture of neodymium-iron-boron permanent rare earth magnets -- from feed stocks supplied by Molycorp's Mountain Pass, California rare earth mine and processing facility.

However, the transaction also expands Molycorp's manufacturing capabilities beyond rare earths into the production of the rare metals niobium and tantalum, which between them have a wide variety of uses in electronics, materials manufacture, optics, health care, chemical process equipment, power generation systems, aerospace, superconductive materials, and others. AS Silmet is one of the world's leading producers of pure niobium and tantalum metal.

10th April 2011

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