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Molycorp Files for Bankruptcy Protection
Molycorp Files for Bankruptcy ProtectionThe rare-earths miner also reaches an agreement with major creditors to restructure its $1.70 billion debt load
By John W. Miller And Anjie Zheng
john.miller@wsj.com
Updated June 25, 2015 7:25 a.m. ET
Molycorp Inc. filed for bankruptcy protection Thursday, as the long-struggling rare-earths miner turned a page on one of the most dramatic commodities busts in recent years.
The only U.S. miner and producer of rare-earth elements—15 elements used as niche ingredients in magnets, batteries, catalytic converters and other high-tech products—said it had secured an agreement with creditors to restructure its $1.7 billion in debt. The deal also provides $225 million in new financing to continue operations.
Molycorp and 20 subsidiaries filed chapter 11 petitions in the U.S. Bankruptcy Court in Wilmington, Del. The company said it expects to exit chapter 11 before the end of 2015.
The filing was expected. Fueled by restrictions on exports of rare earths by China, the world’s dominant supplier, Molycorp’s market value rocketed up to over $6 billion five years ago. But China then relaxed its rules, and battery and magnet makers found alternatives to rare earths. Molycorp went into a long slide. It hasn’t turned a profit since 2011.
....
—Peg Brickley contributed to this article.
By John W. Miller And Anjie Zheng
john.miller@wsj.com
Updated June 25, 2015 7:25 a.m. ET
Molycorp Inc. filed for bankruptcy protection Thursday, as the long-struggling rare-earths miner turned a page on one of the most dramatic commodities busts in recent years.
The only U.S. miner and producer of rare-earth elements—15 elements used as niche ingredients in magnets, batteries, catalytic converters and other high-tech products—said it had secured an agreement with creditors to restructure its $1.7 billion in debt. The deal also provides $225 million in new financing to continue operations.
Molycorp and 20 subsidiaries filed chapter 11 petitions in the U.S. Bankruptcy Court in Wilmington, Del. The company said it expects to exit chapter 11 before the end of 2015.
The filing was expected. Fueled by restrictions on exports of rare earths by China, the world’s dominant supplier, Molycorp’s market value rocketed up to over $6 billion five years ago. But China then relaxed its rules, and battery and magnet makers found alternatives to rare earths. Molycorp went into a long slide. It hasn’t turned a profit since 2011.
....
—Peg Brickley contributed to this article.
Molycorp Struggles to Survive Rare-Earths Bubble
U.S. rare-earths miner is expected to skip loan payment, which could lead to bankruptcy filing
Molycorp, the U.S.’s only miner and processor of rare-earths elements, has suffered three straight years of quarterly losses. Photo: JOHN W. MILLER/THE WALL STREET JOURNAL
By John W. Miller
john.miller@wsj.com
Updated May 31, 2015 8:53 p.m. ET
MOUNTAIN PASS, Calif.—In the dusty mountains of the California-Nevada border, 4,800 feet above sea level, the U.S.’s only miner and processor of rare-earths elements is struggling to squeeze a profit out of its small open-pit mine and plant.
On Monday, Molycorp Inc. said it would skip a $32.5 million loan payment, triggering a 30-day grace period that could lead to a bankruptcy filing before the end of June.
The company is trying to survive one of the biggest commodity bubbles in economic history. Five years ago, export restrictions by China, the world’s dominant supplier, and a global political spat inflated the value of rare earths—15 elements used as niche ingredients in magnets, batteries, catalytic converters and other high-tech products—and propelled Molycorp’s stock-market value to over $6 billion.
Since then, rare-earths prices have been on a long slide downward. Now with a market capitalization of around $150 million, Molycorp is indebted and unprofitable. Customers are putting in orders, but the company hasn’t met production targets at Mountain Pass, and is in restructuring talks with firms representing its creditors.
Molycorp, the U.S.’s only miner and processor of rare-earths elements, has suffered three straight years of quarterly losses. Photo: JOHN W. MILLER/THE WALL STREET JOURNAL
By John W. Miller
john.miller@wsj.com
Updated May 31, 2015 8:53 p.m. ET
MOUNTAIN PASS, Calif.—In the dusty mountains of the California-Nevada border, 4,800 feet above sea level, the U.S.’s only miner and processor of rare-earths elements is struggling to squeeze a profit out of its small open-pit mine and plant.
On Monday, Molycorp Inc. said it would skip a $32.5 million loan payment, triggering a 30-day grace period that could lead to a bankruptcy filing before the end of June.
The company is trying to survive one of the biggest commodity bubbles in economic history. Five years ago, export restrictions by China, the world’s dominant supplier, and a global political spat inflated the value of rare earths—15 elements used as niche ingredients in magnets, batteries, catalytic converters and other high-tech products—and propelled Molycorp’s stock-market value to over $6 billion.
Since then, rare-earths prices have been on a long slide downward. Now with a market capitalization of around $150 million, Molycorp is indebted and unprofitable. Customers are putting in orders, but the company hasn’t met production targets at Mountain Pass, and is in restructuring talks with firms representing its creditors.
