Molycorp is the sole producer of rare earth oxides in the Western Hemisphere.The Mountain Pass,California company has reached profitability,and CEO Mark Smith indicates that the condition out of China is driving his company.The supply side is not nearly strong enough to meet the demand both in and outside of China.
We're seeing not just price realisation,but a volume increase as well.We see the demand continuing to climb very rapidly.China cannot produce enough for their own in country needs.
A 30-35,000 ton supply of rare earth is needed per year.Molycorp puts out 5-6,000 tons for its customers.We are fully funded to close the Sumitomo deal,under which Sumitomo Corporation of Japan will provide Molycorp with financing in exchange for a seven year supply of rare earth products.We certainly would like to enter into contracts.
We have to stay focused on our 781 million dollar expansion project.It is the number one priority for every employee in the company.We have to bring that project in on time and within budget.That's what people invested in Molycorp for.
We don't foresee any let up in demand for rare earth elements,Mark Smith noted.The oxides,considered critical by industries such as aerospace and defence,are utilised in diverse applications such as lasers;computer memory;aerospace components;magnets;batteries;and PET Scan detectors,as well as X-ray components.
Molycorp(MCP)
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