Molycorp’s rare earth reserves jump 36%

Cecilia Jamasmie | April 10, 2012 | 3:14 pm
Critical Metals • Asia • China • Europe • Rare Earth

Rare-earth oxides. (Author: Peggy Greb, US Department of Agriculture)

U.S.-based Molycorp, Inc., one of the only non-Chinese producers of rare earths, announced today that its proven and probable reserves of rare earth minerals at its Mountain Pass, California facility have increased by 36%, according to a new independent estimate.

The updated estimate, based on the SEC’s rigorous “Industry Guide 7” definition of proven and probable mineral reserves, expands Molycorp’s reserves to 18.4 million short tons of rare earth ore, at an ore grade of 7.98% and a cut-off grade of 5%. This compares to a previous 2010 estimate of Molycorp’s proven and probable reserves of 13.6 million short tons. Both independent analyses were done by SRK Consulting of Lakewood, Colorado, an industry mining consulting firm that specializes in such estimates.

CEO Mark Smith said exploration drilling at the project could continue to grow reserves at the mine, which Molycorp is refurbishing and aims to be producing at a rate of 19,050 t/y of rare earths oxides by the end of the third quarter.Smith added that the 5% cutoff grade consulting engineers SRK used to calculate the reserves was higher than the head grades of most other known rare-earth projects around the world.

On March 8, the Colorado-based miner announced a $1.3 billion friendly deal to buy Neo Material Technologies, which processes rare-earth elements to make products including permanent magnets, in locations including China and Thailand. This deal gave Molycorp access to advanced rare earth processing capabilities, specifically the Toronto company’s patented magnet technology, and a sales channel into China for the 17 elements.