Once touted as the United States' answer to China's monopoly on the rare earths market, Molycorp (OTCMKTS:MCPIQ), the only US-based rare earths producer, announced Thursday that it and its North American subsidiaries have filed for Chapter 11 bankruptcy. Those who've been following Molycorp in the last couple of months no doubt saw the writing on the wall. Indeed, the company's Q1 results, released at the beginning of May, painted a dire picture, showing that Molycorp had not yet achieved breakeven cash flow from operations, had outstanding debt of $1.7 billion and was at risk of being delisted from the NYSE. Molycorp saw little progress between then and filing for bankruptcy. In June it took advantage of 30-day grace periods on interest payments for both its senior notes due 2020 and senior unsecured convertible notes due 2016. It also postponed its annual shareholder meeting. The situation wasn't always that bad, however. In fact, as Bloomberg points out, back in 2011 Molycorp was an investor favorite — its share price "soared dramatically" after China, the world's largest supplier of rare earths, introduced export restrictions. Rare earths are used in essential materials like magnets, batteries and high-strength alloys, and investors and market watchers were certain that manufacturers of those products would require non-Chinese sources of rare earths. Unfortunately, rather than wait for companies outside China to start producing rare earths, many manufacturers decided to look for rare earths substitutes. That substitution, coupled with delays at Molycorp's California-based Mountain Pass mine, combined to push the company under the water. China's easing of its export restrictions also didn't help.