Molycorp Acquires Processing Facilities
In separate transactions announced in April 2011, Molycorp reported it had acquired a 90.023% controlling stake in AS Silmet, an Estonia-based rare metal and rare earth metal producer, and a 100% interest in Santoku America, Inc., a leading producer of high-purity rare earth alloys and metals based in Arizona. The Silmet transaction was valued at about $89 million; the Santoku America transaction was valued at $17.5 million. Silmet has changed its name to AS Molycorp Silmet. Santoku America has been renamed Molycorp Metals and Alloys, Inc.
Molycorp Silmet now provides Molycorp with its first European base of operations and doubles the company's rare earth oxide equivalent production capacity from 3,000 to 6,000 mt/y. The Estonian plant immediately began sourcing rare earth feed stocks from Molycorp's Mountain Pass, California, rare earth operations, making it the first rare earth oxide and metal producer in Europe not dependent on rare earth materials sourced from China.
Molycorp Silmet's main focus will be on the production of rare earth oxides and metals; however, the transaction also expands Molycorp's manufacturing capabilities beyond rare earths into the production of niobium and tantalum metal, which between them have a wide variety of uses in electronics, materials manufacture, optics, health care, chemical process equipment, power generation systems, aerospace, superconductive materials and other applications. The Estonian company is one of the world's leading producers of pure niobium and tantalum metal.
Molycorp President and CEO Mark Smith said, "In the short-term, this acquisition will greatly increase our ability to supply our products into the increasingly tight global rare earth market and provide a convenient base from which to supply European customers."
Molycorp acquired Santoku America from Japan-based Santoku Corp. The purchase gives Molycrop the capability to manufacture and sell rare earth alloys for the production of neodymium iron boron (NdFeB) magnets (used in electric and hybrid cars, advanced wind energy turbines, and many high tech electronics and applications) and samarium cobalt (SmCo) magnets (used in defense and other applications), as well as a variety of other specialty alloys and products.