Molycorp production push to challenge Chinese rare earth dominance
The USA's largest rare earth producer Molycorp (NYSE:MCP) is mounting a credible challenge to Chinese rare earth dominance by dramatically scaling up output and potentially increasing its global market share to 30% from 4% at present.
According to reports in China's financial press Molycorp plans to invest USD$895 million in rare earth operations and double capacity from 20,000 tonnes to 40,000 tonnes, although CEO Mark Smith has yet to provide a schedule for these ambitious targets.
Chen Zhanheng from the Chinese Society of Rare Earths is cited by Beijing's Global Times as saying that the move will put pressure on China's rare earth exports, especially given the USA and Japan's current reliance upon Chinese supply.
According to Chen Molycorp's scheduled surge in output is unlikely to severely impact China's overall sales of rare earth minerals, as most of its supply is used for domestic consumption.
If Molycorp's planned expansion comes to fruition it could ameliorate trade tensions between China and other leading economies over rare earth minerals, which recently culminated in the US, EU and Japan successfully applying for a WTO probe into China's export curbs.
China is currently the world's largest producer and exporter of rare earths, supplying 95% of worldwide demand.