Mountain Pass sells for $20.5 million

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.

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.