Molycorp, Inc.'s (NYSE: MCP) (“Molycorp” or the “Company”) Executive VP and General Counsel, John F. Ashburn, Jr., today announced that the Company has filed a claim against M&K Chemical Engineering Consultants, Inc. (“M&K”) and certain current and former officers and owners of M&K in Colorado Federal District Court arising from a commercial dispute over defects in engineering services related to the Company’s Project Phoenix modernization and expansion of its Mountain Pass, California, facility.
While the Company generally does not comment on active disputes, Mr. Ashburn indicated that, due to the high level of public interest in the Project, he wanted to ensure that the reasons underlying the dispute were clear.
Mr. Ashburn said that the claim was filed in an attempt to recover a portion of the costs incurred by the Company in rectifying defective engineering services for which the Company believes the defendants are responsible and that the effects of the defective engineering underlying the claim have already been largely mitigated by the Company’s Technology Group and other engineering companies working on the Project. Those defects will not impact the timing of the Company’s plans to ramp up production at its Mountain Pass facility, Mr. Ashburn said, and the Company still expects to achieve full Phase 1 production rates by the end of the current quarter as previously announced.
Mr. Ashburn noted that, while unfortunate, the claim filed by Molycorp essentially amounts to nothing more than a commercial dispute over monetary damages.About Molycorp, Inc. Molycorp is a leading rare earths and rare metals company, and combines a world-class rare earth resource at Mountain Pass, California, with advanced, high-purity rare earth and rare metal materials processing capabilities. With 26 locations across 11 countries, Molycorp is vertically integrated across the global rare earth mine-to-magnetics supply chain. It produces rare earth magnetic materials as well as a variety of high-purity, custom engineered products from 13 different rare earths (lights and heavies) as well as five rare metals (gallium, indium, rhenium, tantalum and niobium), and the transition metals yttrium and zirconium. Through its Molycorp Magnequench subsidiary, the Company is a leading global producer of neodymium-iron-boron (NdFeB) magnet powders, used to manufacture bonded NdFeB permanent rare earth magnets. Through its joint venture with Daido Steel and Mitsubishi Corporation, Molycorp expects to begin manufacturing next-generation, sintered NdFeB permanent rare earth magnets in early 2013. For more information please visit www.molycorp.com. Safe Harbor Statements
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