Capacity is less than expected, the largest U.S. supplier of rare earth ore plight cash short defects

America's largest rare earth miner MolycorpInc company , due to capacity less than expected sales decline loss widened , operators in trouble, since since October 15 , stock prices plummeted.

October 15 , MolycorpInc announced cash shortages due to the company , plans to sell $ 200 million worth of shares to raise funds to maintain operations , announced the news direct result of the company's stock price plummeted. According to Reporters statistics, October 14 , the company's closing price of 7.1 U.S. dollars / share, Oct. 18 , to close at $ 5.36 / share, the cumulative decline to 25%.

Public information , MolycorpInc was the world 's largest rare earth production enterprises, because of cost and environmental issues early in this century has been discontinued . 2007 due to rare earth prices, part of the company to resume production ; past two years, stimulated by the rare-earth prices have soared to begin large-scale increase production capacity , the end of 2012 production capacity of approximately 19,000 tons .

MolycorpInc the U.S. Securities and Exchange Commission said in a report , because California Mountain Pass (MountainPass) rare earth mine production failed to meet expectations within the planned time , resulting in the company's rare earth production was lower than expected , which the company in the first three quarters of revenue and cash flow caused damage .

It is understood , MolycorpInc its Mountain Pass rare earth mine in California is second only to our Baotou Bayan Obo rare earth mine in the world's second largest mine . The mine ore reserves of 50 million tons to maintain rare earth an average grade of up to 8 % to 9% , with a total resource of 4.3 million tons of rare earth oxides . In addition , MolycorpInc financial information, in 2012 the company a net loss of $ 360 million , net profit for the third quarter 2013 loss of $ 71 million .

In this regard , the rare earth industry analyst Du Shuai Bing that , MolycorpInc addition to its sales decline , but also in the impact of domestic rare earth distress of the company one of the reasons .

It is understood that , in fact , due to cost advantages, China Rare Earth [ -0.82 % ] corporate Despite the sharp drop in performance , but the overseas export volume is still growing .

Hohhot Customs released data show that three quarters of 2013, exports of rare earth 3850.9 tons Inner Mongolia Autonomous Region , a 62% increase over last year , of which 50% are exported to the United States .

Orient Securities analyst Zhang Xinping is expected , MolycorpInc rare earth mining operations or unsustainable. Its said that different from the past , MolycorpInc latest mid-year report does not update the company 's production capacity of 40,000 tons of rare earth production time , it just means that the price will depend on the specific needs and conditions, return on capital expenditure and final decisions , MolycorpInc on rare earth business the outlook is expected to be reduced.

Zhang Xinping also noted that the current surplus of light rare earth upstream , downstream demand and other factors sluggish rebound in the price of rare earth , rare earth business long if MolycorpInc in a loss position , the business or unsustainable.


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