Molycorp transitions its California facility to ‘care and maintenance’ mode

Molycorp Inc., headquartered in Greenwood Village, Colorado, has announced that it will transition its Mountain Pass, California, rare earth facility to “care and maintenance” mode and will serve its rare earth oxide customers via its production facilities in Estonia and China. Customers of its rare earth magnetic materials, as well as its rare earth-based water treatment products, will not be affected, according to Molycorp.

Rare earth production at the Mountain Pass facility will be suspended no later than Oct. 20, 2015. The site, including idled machinery and equipment, will be maintained to ensure it remains in safe and stable condition and can meet government regulatory commitments.

Rare earth pricing, which has declined dramatically over the past four years, was a key factor in the decision to suspend rare earth production at Mountain Pass, company officials say.

Molycorp refers to itself as a global, vertically integrated producer of rare earth products used in many electronic, transportation, industrial and clean energy applications. Some of the company’s R&D efforts have been geared toward setting up a recycling system to harvest and recycle rare earth metals from discarded electronics and fluorescent light bulbs.

In July 2015 Molycorp announced that it had received bankruptcy court approval for $22 million in interim financing provided by an affiliate of Oaktree Capital Management, Los Angeles. The new funds were intended to “support operations going forward for an interim period while the company continues to negotiate with Oaktree and a group representing the secured 10 percent noteholders, both of which represent secured creditors that have presented competing debtor-in-possession (DIP) lending proposals,” according to the company.

Later in July, the company announces that it had received bankruptcy court approval for an improved debtor-in-possession (DIP) financing package provided by Oaktree Capital Management.