Source: Adobe Stock/jarous
ERP Strategic Minerals, LLC, part of the ERP Group of companies, has been selected as the stalking horse bidder by the Chapter 11 trustee for Molycorp Minerals, LLC and related entities and entered into an asset purchase agreement with Molycorp’s bankruptcy trustee to purchase substantially all the assets and the surface property rights of the company’s debtors at the Mountain Pass Rare Earths mine in California.
The offering price is $1.2 million, a far cry from the $40 million offered and abruptly withdrawn earlier this year by Russian-born investor Vladimir Iorich and his Pala Invesments firm. However, ERP, as part of its offer, is also promising to shoulder up to $100 million worth of Mountain Pass’ debts and liabilities.
The purchase agreement has been filed with the U.S. Bankruptcy Court in Delaware, together with a sale motion seeking the Court’s approval of the sale under section 363 of the Bankruptcy Code.
The Mountain Pass mine is located in San Bernardino County, Calif., approximately 50 miles south of Las Vegas, and it’s the only mine and processing facility for rare earths minerals in the U.S. It was placed into care and maintenance by the bankruptcy trustee in 2015 but could be brought back online fairly quickly if ERP’s purchase is approved.
ERP said in its release that it will “work collaboratively with the County of San Bernardino, the California state agencies, and other regulatory stakeholders to complete the necessary technical studies and restart plan to return the mine to sustainable operations, supported by an experienced and skilled workforce from the local community.”
ERP is controlled by majority investor Tom Clarke, a coal-mining and nursing home magnate who has, in many of his investments, vowed to offset the environmental impact of mining coal by planting trees.
Clarke said ERP plans to work with Iorich’s firm, Pala, to restart operations at Mountain Pass. Pala and Australia’s Peak will be involved in planning to get the mine up and running again, according to ERP’s press release. Restarting Mountain Pass as a rare-earths-mining operation will also involve JHL Capital Group LLC, a Chicago investment firm that controls the mineral rights at the site.