Molycorp to ramp up Mountain Pass production early next year
NEW YORK (Metal-Pages) 28-Oct-09. Molycorp Minerals LLC is set to ramp up interim production at its California-based Mountain Pass rare earths project early next year as demand for material surges amid growth in end-user markets and tightening supplies.
The Colorado-based company is aiming to boost interim production by 50% starting in January, Molycorp chief executive officer Mark Smith told Metal-Pages.
The Mountain Pass mine is currently producing about 127,000 pounds of didymium and 300,000 pounds of lanthanum a month from previously mined material that has been stockpiled.
The increase in output will also include additional products alongside the didymium and lanthanum, Smith said.
It comes as demand for rare earths from end-user sectors such as transportation, defense and energy grows and puts supplies under pressure.
The supply pipeline is also set to be squeezed as China, which currently supplies around 96.8% of the global rare earths market, looks to consume more material internally.
“It’s not a large increase but every little bit helps,” Smith told Metal-Pages, noting that rare earth consumers are in search of alternative sources as less Chinese material becomes available.
China spooked the market in August after it released a draft development plan that called for tighter controls on the production and exports of rare earths in the next six years.
With some consumers expected to struggle to secure supplies, the development schedules for several rare earth projects in North America could be brought forward to fill the void, according to analysts.
Underlining the increase in demand for non-Chinese rare earth material, Molycorp has already received letters of intent for over 145% of scheduled restarted production at Mountain Pass, according to Smith.
Molycorp expects to have full financing for the restart of the Mountain Pass project lined up by the middle of next year, he added.
The company expects to complete a pre-feasibility study and resource study as part of its National Instrument 43-101 disclosure to Canadian authorities by November 1.
Results from the studies are expected to show significantly bigger resources than previously indicated and a mine life greater than the estimated 100 years, according to Smith.
“We’re very pleased with the draft results and it shows that this deposit is truly world class in nature,” he said.
A previous U.S. Geological Survey indicated that the Mountain Pass deposit holds around 20 million tonnes of rare earth oxide (REO) at an average of about 9.3%. The survey was also based on a REO cut off of 5%.
Once the surveys are completed, Molycorp will then work on the reserve study section of the 43-101 submission and aims to complete it in a timeframe of between 30 to 60 days.
“This gets into the hard reserve numbers that become bankable,” said Smith.
Molycorp is aiming to start mining, crushing and milling fresh ore for full production in 2012.
Smith said the company was still on track to meet the current production schedule.
Molycorp has said previously that it plans to ramp up Mountain Pass to a production level of 40 million pounds annually of rare earth products.