Molycorp and Japan-based Hitachi Metals jointly announced in late December 2010 that they have entered into an agreement to form joint ventures to produce rare earth alloys and magnets in the United States. The ventures would be focused on the manufacture of neodymium-iron-boron alloys and magnets that are vital to many clean energy, automotive, computer, health care, communications and other technologies.

Molycorp currently produces about 3,000 mt/y of commercial rare earth materials at its Mountain Pass, California operations. Following expected completion of current modernization and expansion efforts at Mountain Pass by the end of 2012, Molycorp expects to produce at a rate of about 20,000 mt/y of rare earths oxide equivalent and to offer a range of rare earth products, including high-purity oxides, metals, alloys and permanent magnets.

Molycorp and Hitachi expect to sign definitive agreements for the alloys joint venture by early April 2011. Signing of definitive agreements for the magnets joint venture, subject to satisfactory conclusion of a feasibility study and other conditions, is expected follow later in 2011.

Molycorp CEO Mark Smith said, “These joint ventures are an integral part of our “mine-to-magnets” business plan, and they move our company and the United States one step closer to realizing the strategic goal of re-establishing a complete rare earth manufacturing supply chain in the U.S.”

Molycorp also has entered into a Memorandum of Understanding with Sumitomo Corporation pursuant to which Sumitomo will assemble an equity and debt financing package in the aggregate amount of $130 million for Molycorp’s use in completing its “mine-to-magnets” manufacturing supply chain. In exchange, Molycorp will provide Sumitomo with substantial quantities of several rare earth products over the next seven years.