By Adam Currie — Exclusive to Rare Earth Investing News
The Mountain Pass facility “dominated” worldwide REE production from the 1960s to the 1980s, with the deposit mined on a large scale between 1965 and 1995, during which time it supplied most of the global supply of rare earth metals.Mountain Pass production suspended Issues relating to the facility's economic sustainability were threatened in the early 1990s when Chinese politician Deng Xiaoping famously compared China's abundance of rare earth to the Middle East's oil reserves. The introduction of Chinese REEs to the global market had a profound effect on pricing. Mountain Pass was unable to compete, and given the mine's growing ecological costs as a result of a halt in chemical processing in 1998 on the back of a series of wastewater leaks, operations were ended in 2002. The mine remained inactive after 2002, though processing of previously-mined ore continued at the site. A second chance Chevron sold the facility to privately-held Molycorp Minerals LLC in 2008, a company specifically formed to revive the mine. In 2010 Molycorp became a publicly-traded firm and announced that it had secured all the environmental permits needed to begin Project Phoenix, an $895 million expansion and modernization project at the site. The project was aimed at transforming the mine's capabilities and dramatically increasing the amount of rare earth material to market. The company has estimated that the Mountain Pass deposit has an expected mine life of 30 years, and that by the end of 2012 it will have the capacity to produce up to 40,000 metric tonnes of REO per year. From a production perspective, lanthanum, cerium, neodymium, and praseodymium products will make up the majority of commercial output from Mountain Pass. However, Molycorp has also stated that the high volume of ore processed, coupled with high recovery rates, will enable it to produce commercially significant quantities of heavy REEs including europium, terbium, dysprosium, and yttrium. Game changer If the latest estimates prove to be accurate, the Mountain Pass deposit has the ability to become a market game changer. From an investor perspective, the timing could not be better in that total proven and probable reserves now add up to approximately eleven times current global demand at a time when the company's closest competitor, Lynas Corporation Ltd. (ASX: LYC), faces permitting delays at its processing facility in Malaysia.
Securities Disclosure: I, Adam Currie, hold no direct investment interest in any company mentioned in this article.Overview of Molycorp Californian Rare Earth Deposit from Rare Earth Investing News