Part of the Stock Digest group of websites: Visit Tech Stock Digest  

Mountain Pass sells for $20.5 million

Chinese-led consortium picks up America's only rare earths mining operation

 

The new owner of the Mountain Pass rare earths mine in California is MP Mine Operations LLC – a Chinese-led consortium including rare earths miner Shenghe Resources.

The mine, which was the only functioning rare earths mine in the US before it went bankrupt in 2015, went up for auction on Wednesday.

The eventual sale price was significantly higher than ERP's original "stalking horse" offer of $1.2 million back in April.

MP Mine Operations (MPMO) put in a winning bid of $20.5 million, half a million above the competing consortium made up of ERP Strategic Minerals LLP, Swiss private equity firm Pala Investments and Peak Resources (ASX:PEK), an Australian rare earths company. The losing consortium also includes two creditor groups from the bankruptcy of Molycorp, the mine's former owner.

The eventual sale price was significantly higher than ERP's original "stalking horse" offer of $1.2 million back in April. The deal still faces scrutiny from regulators, who may take issue with foreign ownership of a strategic asset. Rare earths are used in a number of important economic and strategic applications including magnets for green technologies like wind turbines and hybrid cars, aircraft engines and computer hard drives.

Mountain Pass was the only rare earths mine operating in the United States, before it went bankrupt in 2015 – a victim of low rare earth oxide prices. At the time Molycorp listed $1.7 billion in debt. Through bankruptcy proceedings Molycorp was restructured, allowing it to receive $130 million in debt financing.

Molycorp then moved Mountain Pass into care and maintenance, while continuing to serve customers through its production facilities in Estonia and China.

Mountain Pass was expected to be America’s flagship source of rare earths. In 2010 Molycorp sensed an opportunity to capitalize on reduced rare earth oxide exports from China – which supplies about 90 percent of the world's rare earth minerals –

To continue reading please click link http://www.mining.com/mountain-pass-sells-20-5-million/

Subscribe to the RSD email list and get the latest resource stock activity directly to your inbox, for free.

MARKET SUMMARY

INDICES

Name Last Change
DOW 24798.20 0.59%
S&P 500 2690.90 0.56%
NASDAQ 6993.52 0.81%
TSX 16139.53 0.60%
TSX-V 805.95 0.00%

Resource Commodities

Name Last Change
Gold 1260.92 0.45%
Silver 16.13 0.50%
Copper 3.11 1.98%
Platinum 912.24 1.74%
Oil 57.30 0.45%
Natural Gas 2.61 2.76%
Uranium 24.25 N/A
Zinc 1.44 0.00%

@RSDigest ON TWITTER

Part of the Stock Digest family of websites
Small Cap Stock Digest