To get more insight on the news, the Investing News Network spoke with Luisa Moreno, senior analyst and managing partner at
Tahuti Global,
about what led to Molycorp’s latest troubles and what the suspension of
production at Mountain Pass could mean for other players outside of
China.
While Moreno admitted that times are
still tough in the rare earths sector, she suggested there could be
opportunity for other companies in the wake of Molycorp’s troubles.
Falling rare earths prices, commissioning issues
Despite earlier statements suggesting
Mountain Pass would remain online, Moreno did not seem surprised that
it was put on care and maintenance.
“Essentially, they have negative
earnings out of that plant, so it’s not profitable at all,” she stated.
“Obviously they cannot continue running it for perpetuity unless there
is improvement in the market in terms of prices, or unless they can fund
further the commissioning of the plant.”
Moreno noted that Molycorp’s other
assets in China and Estonia are profitable, but that those operations
might not necessarily be able to support Mountain Pass.
Taking a closer look at what went
wrong, Moreno noted that after spending $1.5 billion expanding Mountain
Pass, Molycorp still wasn’t able to fully optimize its operations to
make them cost effective. The company had issues with leaching at the
front end of the plant, as well as problems with a plant meant to
recycle reagents used in the recovery process.
Moreno stated that only those working
on the ground at the plant could estimate how close Mountain Pass was
to reaching optimization.
“It’s possible that it’s a question
of time,” she said. “By trial and error, you have to run through the
whole plant, and eventually you can optimize everything. And that’s
fine, and I think it’s possible. But they might need a few more quarters
to achieve it, and obviously they were running dangerously out of
money.”
Still, Moreno suggested that “keeping it simple and small is sometimes better” in terms of rare earths projects.
She explained that Molycorp chose to
use conventional technologies for the mining and production of rare
earths, but that it had planned a large-scale, complex, fully integrated
plant that was very green and clean. “All of that is good, but maybe if
they had tried smaller modular upgrades, they might still be in
production today,” she said.
Of course, Moreno noted that falling
rare earths prices made things even more difficult. “It’s not unusual
for a chemical plant to take over two years to commission,” she
explained. “The difference is that [Molycorp found] themselves in a
rather poor commodity price environment.”
Rare earths prices have
continued to drop this year,
driven in part by the elimination of export tariffs from China. Moreno
noted that prices for some metals have touched levels not seen since the
early 2000s, and that others are fast approaching those levels.
Opportunity for juniors?
Moreno still believes that Molycorp
will continue to operate in the long run. While only those at the
company know its next move, Moreno suggested it might be possible to
eventually split up the company, allowing Molycorp to continue with its
profitable assets only. In the meantime, she still sees opportunities in the space for other rare earths players.
“I think there is an opportunity, if
these players can come up with a story that is different from what
Molycorp has presented,” she said. “Maybe that might be a different
business model where instead of mining, they’re using stockpiles from
other operations or using a by-product of different mining operations.”
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For example, Moreno stated that
Medallion Resources (TSXV:
MDL,OTCQX:MLLOF)
is looking to produce rare earths from monazite sand, which was the
main mineral for the production of rare earths in the 1960s. Since
monazite is a by-product of mineral sands production, Medallion could
buy the material from mineral sands companies without having to incur
the costs of a mining project itself.
Moreno added that some companies are pursuing innovative processing
technologies that could help bring costs down and make them more competitive. She pointed to Ucore Rare Metals (TSXV:
UCU) and GeoMegA Resources (TSXV:
GMA) as examples.
“Ucore, for instance, has a deposit
in Alaska, but they also are pursuing a new technology, molecular
recognition technology, with a company that has built that for the
recovery of a different metal,” she said.
“
Those [companies] that are able to
bring new solutions, either by using stockpiles from existing mining
operations, or by going in and developing their own mine with really
specific and economic processing technologies. I think that could be
really interesting.”
Quelle:
http://investingnews.com/daily/resource-investing/critical-metals-investing/rare-earth-investing/luisa-moreno-molycorp-news-medallion-resources-ucore-rare-metals/?mqsc=E3808743&utm_source=WhatCountsEmail&utm_medium=INN_FullList+Rare%20Earth%20Investing+Rare%20Earth%20Investing&utm_campaign=Rare%20Earth%20Investing
Quelle:
http://www.techmetalsresearch.com/metrics-indices/tmr-advanced-rare-earth-projects-index/
Quote:
R.I.P. Molycorp: Einstiger Mega-Highflyer im Rohstoff-Sektor der "Seltenen" Erden meldet Insolvenz an
Ein wahnsinnige Story geht zu Ende. Von einem einstigen Multi-Milliarden Unternehmen, Sektor-Leader und Vorreiter in die Insolvenz. Der Aktienkurs fiel von 80 USD auf weniger als 50 Cents zurück, bevor die Verantwortlichen voll komplett das Handtuch warfen..
Link:
http://rohstoffaktien.blogspot.de/2015/06/rip-molycorp-einstiger-mega-highflyer.html
Transforming a global business - “back to the future” - speech
- Source: 
