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TORONTO (miningweekly.com) – US rare earths producer Molycorp’s NYSE-listed stock on Monday fell more than 16.2% after the company reported that it had failed to make a profit for the third consecutive year.
Greenwood Village, Colorado-based Molycorp reported a full-year 2014 net loss attributable to common stockholders of $607.8-million, or $2.70 a share, 58% wider than the loss of $385.8-million, or $2.17 a share, reported in 2013.
Excluding special items, such as the effect of operational expansion items, out-of-ordinary business expenses and certain other noncash items, Molycorp reported an adjusted loss of $1.31 a share.
Rare earths producers such as Molycorp and Australia's Lynas had been weighed down by concerns about how fast they were burning through cash, low prices and the possibility that they might need to issue shares to raise more funds.
The rare earths industry is in a state of consolidation after a Chinese export clampdown prompted a rapid spike in prices in 2010/11. However, the global economic crisis and a flood of new supplies resulted in the subsequent collapse of prices in 2013. Prices had now stabilised and were expected to remain so in the long term.
Lynas on Friday reported a net loss before tax of $103.5-million for the six months to December 31, a widening of the $59.3-million loss in the previous corresponding period.
For the full year, Molycorp sold 13 019 metric tons of product at an average selling price (ASP) of $36.53/kg and generated a gross loss of $99.6-million. This compared with volume sales of 12 873 t at an ASP of $43.07/kg and a gross loss of $67.2-million for 2013.
The company, which operated the Mountain Pass rare earths mine and processing facility, in California, reported consolidated net revenues of $475.6-million, a 14% fall when compared with 2013, as softened rare-earth pricing hit the top line.
For the fourth quarter ended December, Molycorp reported higher output, producing 1 328 t of rare earth oxide (REO) equivalent, up 28% on the corresponding period of 2013.
Full-year 2014 output at Mountain Pass was up 37% year-on-year from 3 473 t in 2013.
Molycorp said its Chlor-Alkali plant at Mountain Pass was performing well, and the company was able to produce or buy enough supplies of hydrochloric acid for REO production.
Per-unit cash production costs at Mountain Pass declined in the fourth quarter to $21.02/kg, a 38% decrease over the third-quarter costs of $33.80/kg.
Molycorp’s stock had been trading under the NYSE’s $1 required listing threshold since November, but had in February doubled in value from below $0.30 a share to about $1.06 apiece, before falling back once more. On Monday the stock closed at $0.74 apiece, before falling $0.12 to $0.62 in after-market trading.