Molycorp Signs Supply Agreement with Hitachi
Molycorp announced on August 12, 2011, the signing of a new agreement with Hitachi Metals to supply Hitachi with rare earth magnetic materials, including didymium (a mix of neodymium and praseodymium) metal and alloy, as well as lanthanum oxide. The three-year deal extends and expands upon an existing supply relationship between the companies and significantly increases the amount of rare earth materials Molycorp will provide to Hitachi. The volume begins at a level comparable to the companies' current agreement and grows substantially when Molycorp reaches its Phase 1 production level in 2012 at its flagship rare earth production facility at Mountain Pass, California, USA.
The new agreement, said Molycorp, demonstrates the progress made in developing its downstream manufacturing capabilities over the past year. Its recently acquired Molycorp Silmet oxide and metal production facility in Estonia and Molycorp Metals and Alloys facility in Tolleson, Arizona, will enable the company to produce the upgraded magnetic materials necessary to meet a significant portion of Hitachi Metals' global requirements.
"The strategic acquisitions we have made this year and the technology innovations we are building into our Mountain Pass facility position us to produce some of the world's most advanced magnetic materials," Molycorp President and CEO Mark Smith said. "We are proud our rapidly growing manufacturing supply chain will be able to meet the exacting specifications of a renowned global technology company like Hitachi Metals."
Separately, Molycorp and Hitachi announced they are suspending discussions for now on their December 2010 letter of intent to create a joint venture in the United States to manufacture neodymium-iron-boron (NdFeB) alloy and permanent magnets made from the alloy. The companies were unable to reach agreement on certain key matters affecting the value of the joint venture to each party.
"We remain fully committed to producing rare earth permanent magnets and to capturing the highest value of our rare earth materials throughout the supply chain," Smith said. "We have been in advanced discussions with other companies regarding magnet joint-venture opportunities for some time, and we look forward to sharing more details on these developments in the near future."
On August 21, Molycorp reported it is opening an office in Tokyo, Japan, to better serve its customers there and to build new relationships in the world's largest rare earth consuming nation outside of China.