Rare Earth Production Rises in Q4 at Molycorp’s Mountain Pass Facility

GREENWOOD VILLAGE, Colo. (February 2, 2015) — Molycorp, Inc. (NYSE: MCP) (“Molycorp” or the “Company”) today reported that rare earth production in the fourth quarter of 2014 at its Mountain Pass, California facility increased year-on-year and nearly doubled that of the preceding quarter.

Mountain Pass completed Q4 of 2014 with 1,328 metric tons (mt) of rare earth oxide (REO) equivalent production. That compares to 1,034 mt in Q4 of 2013 and 691 mt in Q3 of 2014. Full year 2014 production totaled 4,785 mt, compared to 3,473 mt in 2013. Per-unit cash production costs at Mountain Pass also declined sequentially in Q4 of 2014.

Company officials said that the higher production volumes they expect at Mountain Pass in 2015 should coincide with relatively strong demand the Company is seeing for products such as the magnetic rare earth material Neodymium/Praseodymium, Lanthanum, and Light Rare Earth Concentrate (“LREC”).  Molycorp processes Mountain Pass LREC at vertically integrated downstream processing facilities into a variety of value-added engineered materials, including rare earth magnetic materials for multiple downstream markets and vehicle emissions catalysts that consume cerium and other materials.

The Company said that its onsite Chlor-Alkali plant at Mountain Pass is performing well in producing hydrochloric acid (“HCl”), a key chemical reagent used in rare earth production at Mountain Pass.  Moreover, commercial availability also has improved, such that HCl currently is no longer a significant constraint to production. Molycorp’s Chlor-Alkali plant helps to lower cash production costs by generating chemical reagents onsite, reducing waste water disposal costs, and further shrinking the environmental footprint of rare earth production.

Company officials reported that repairs of construction-related issues with the facility’s newly expanded Leach system are ongoing. Once fully operational, that system is expected to increase rare earth production and lower operating costs.

“We were pleased to see our production increase in the fourth quarter relative to the preceding quarter and year-on-year,” said Geoff Bedford, President and CEO of Molycorp, Inc. “Optimization at Mountain Pass is ongoing, but our Q4 production demonstrates momentum in the right direction. Rare earth pricing softened in Q4 with market uncertainty surrounding release of final details of China’s ongoing reforms to rare earth mining, separation, and export regulatory policies. However, given the relatively strong internal and external demand we are seeing for many Mountain Pass products, continuing to boost production there is a top operational priority.”