Molycorp stock jumps as plant revamp nears completion
Shares of U.S rare earths miner Molycorp (NYSE: MCP) soared Wednesday, hitting a high of $7.59 earlier in the session, as the company announced two milestones in a $1.25 billion modernization and expansion at its main mine, Mountain Pass in California.
The chloralkali plant will recycle wastewater and produce hydrochloric acid and caustic soda used as part of the rare earth separations process. Company officials said that once fully operational and optimized, the chloralkali plant is expected to help the facility achieve its cash production cost targets, which the Company believes will make it competitive with the lowest cost producers globally.
The Colorado-based firm also confirmed that the final unit of its multi-stage cracking plant at Mountain Pass is now mechanically complete and is being commissioned. The unit is part of a multi-stage chemical process designed to increase the facility’s current rare earth recovery rates, increase production throughput, and contribute to lower unit production costs.
“These are the last major construction activities of Project Phoenix, the re-build of Mountain Pass, and we expect these units to be commissioned and enter into production in the fourth quarter of 2013,” said Constantine Karayannopoulos, President and Chief Executive Officer of Molycorp. “Bringing these units online will help us focus on increasing production while continuing to reduce our production costs.”
Molycorp's performance hasn't been great this year. Its shares are down 29% so far, hurt by less in demand, higher costs and weak rare earth prices.