TORONTO (miningweekly.com) – The NYSE-listed shares of North American rare earths producer Molycorp jumped 13%on Wednesday morning after the company announced that construction of its chloralkali plant at its flagship Mountain Pass operation, in California, is complete.
The chloralkali plant would recycle wastewater and produce hydrochloric acid and caustic soda used as part of the rare earth separation process.
Company officials said that once fully operational and optimized, the chloralkali plant was expected to help the facility achieve its cash production cost targets, which Molycorp believed will make it competitive with the lowest-cost producers globally.
Produced mainly in China, rare earths are essential for making high-tech items such as smartphones, tablets and hybrid vehicles, and are also used in automotive catalysts.
In recent times, Molycorp, which had often been considered the standard-bearer for the rare-earth-element sector away from China, reported disappointing earnings that sent its stock sliding.
Molycorp in August reported a wider quarterly loss even as revenue rose, hurt by a sharp drop in prices.
The company also confirmed that the final unit of its multistage cracking plant at Mountain Pass was now mechanically complete and was being commissioned.
The unit is part of a multistage 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 rebuild of Mountain Pass, and we expect these units to be commissioned and enter into production in the fourth quarter. Bringing these units online will help us focus on increasing production while continuing to reduce our production costs," president and CEO Constantine Karayannopoulos said.
The stocks of North American rare earth elements companies at the end of last month rose on news that China’s State Reserve Bureau was likely to start buying billions of yuan of rare-earth minerals this month to bolster its strategic reserves.
Molycorp’s share rose $0.88 to $7.54 apiece before Wednesday noon.