Molycorp Reports Another Quarterly Loss As Rare Earths’ Dead Cat Bounce Ends

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The monthly rare earths MMI® registered a value of 27 in May, a decrease of 6.9% from 29 in April.

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The jump that much of the market felt after being featured on “60 Minutes” was gone this month and Molycorp reported another net loss for Q1.

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Molycorp reported higher production volumes in the first quarter of 2015 at its Mountain Pass, Calif., rare earth facility of 1,479 metric tons of rare earth oxide equivalent. This was an 11% increase over the Q4 2014 production of 1,328 mt.

Molycorp reported Q1 2015 product sales volume of 3,436 mt on a consolidated basis, a 9% increase over the Q4 2014. Net revenues for the quarter were $106 million, an 8% decrease from the Q4 2014.

The Greenwood, Colo.-based rare earth miner reported a net loss of $0.42 per share and a reported a net loss of $0.28 per share for the quarter on an adjusted non-GAAP basis, which compares to an adjusted non-GAAP loss of $0.39 in the Q4 2014.

Molycorp was selected by Siemens AG to supply rare earths over the next 10 years for high-power, sintered rare earth permanent magnets used in Siemens’ wind turbine generators, but it’s unlikely that the proceeds from that deal will help its financial position this year. Molycorp reiterated that it would need more financing to continue operations.

Persistent Low Prices

The problem for Molycorp is much the same as that for the entire rare earths industry: low prices. China ending export quotas on the elements has not yet resulted in higher prices and companies such as Molycorp, Texas Rare Earth Resources and Australia’s Lynas Corp. are feeling the pinch as a result. Many high-tech buyers of the magnets and oxides in the rare earths ground have moved on to other sources.

 

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