By Robert Sullivan — Exclusive to Rare Earth Investing News
Molycorp is looking to at least double production this year to 8,000 to 10,000 tons, and announced in its report last week that it has successfully launched the sequential start up of its new Project Phoenix rare earth manufacturing facility at Mountain Pass.When phase one is completed at the end of Q3 this year, the Project Phoenix facility will have an annual production capacity of 19,050 tonnes of REO. At the end of 2012, the capacity of the facility will be doubled to produce up to 40,000 tons of REO per year. A transition year Despite the promising outlook, Smith noted in a conference call on February 23 that 2012 will be a transition year for the company, with a number of one-time expenses as operations are ramped up at the Project Phoenix facility. And with most of the anticipated growth in output not expected to occur until after the completion of phase one of the facility, it may be a long and uneasy wait for investors should the rare earth market prove to be as volatile as it was last year. One sign that the year is already shaping up to be an active one in the rare earth market surfaced in an interview last Monday with Wang Caifeng, a former official overseer of the rare earth industry with the Ministry of Industry and Information Technology. Caifeng told Bloomberg that “export quotas may be met this year as overseas demand recovers,” adding that “high prices last year had deterred purchases and led to inventories' depletion.” At 31,130 tonnes of REO, China's initial export quotas for 2012 are virtually unchanged from last year's. Should China's full allotment be exported overseas this year, world supplies of REO would effectively double, as only 49 percent of last year's quota was exported over the first eleven months of the year.
Securities Disclosure: I, Robert Sullivan, hold no direct investment interest in any company mentioned in this article. Strong 2011 Results Could Bode Well for Molycorp's 2012 Ramp Up Plans from Rare Earth Investing News