Sumitomo May Buy Stake in Molycorp

Japan's Sumitomo Corp. is in talks with Molycorp to buy a stake in the rare-earths company, according to reports.
By Joseph Woelfel ,

GREENWOOD VILLAGE, Colorado (

TheStreet

) -- Japan's

Sumitomo Corp.

is in talks with

Molycorp

(MCP)

to buy a stake in the rare-earths company, according to reports.

The

Nikkei

reported trading company Sumitomo plans to invest 10 billion yen ($120 million) to buy a stake in Molycorp. The newspaper said a deal could be reached later this week.

A spokesman for Sumitomo told

Reuters

that various options were being discussed for a supply deal, which could lead to it taking a stake in Molycorp, but he gave no further details.

Japanese trading houses recently have been trying to secure new sources of rare earths, which are used in making auto parts and high-tech products, after shipments from China stalled,

Reuters

notes, either because of diplomatic tensions or because China's export quotas had run dry.

China produces 97% of the world's rare earths.

Molycorp shares on Monday rose 18.2% to $32.86 after reports of a deal with Sumitomo surfaced.

-- Written by Joseph Woelfel

>To contact the writer of this article, click here:

Joseph Woelfel

>To submit a news tip, send an email to:

tips@thestreet.com

.

Loading ...