US-based former rare earths producer Molycorp
Inc., which is currently attempting to exit
bankruptcy proceedings, has seen no bidders come forward for
the business as an entire company, meaning that the firm will
likely see its assets sold off in chunks, according to
Quoting sources familiar with the matter, Bloomberg
said that offers are only being made by potential buyers for
the company’s overseas businesses, and not its
Mountain Pass mine and processing facility in California.
Molycorp, which has total debts of around $1.9bn, applied
for Chapter 11 bankruptcy protection in Delaware in July and
put its Mountain Pass site into care and maintenance later in
As part of the bankruptcy process, Molycorp and its
creditors have put forward plans to potential buyers for either
an entire company sale, in which the purchaser would acquire
all arms of the company, or, alternatively, an asset strip
model, in which business divisions are sold off to the highest
Secret bankruptcy plans
At the start of December, Molycorp requested that elements
of its Chapter 11 bankruptcy plan be temporarily sealed,
according to a report by the Wall Street Journal.
The company wants to keep secret a number of facets of its
plan, including financial projections and valuation analyses
prepared by its advisors, in an effort to protect the
information from various bodies invited to submit bids
The request would cover voting materials prepared for
creditors entitled to cast ballots on Molycorp’s
plan to emerge from bankruptcy, the paper said.
Molycorp filed for Chapter 11 bankruptcy protection in June
2015 as Chinese oversupply continued to put negative pressure
on rare earth prices.
The company sought approval for voting materials on its
Chapter 11 restructuring plans on 8 December, with preliminary
bids due after a hearing on its disclosure statement, which
will outline information necessary for creditors to vote on the
The sealing motion will be heard on the same day as the
disclosure statement. If approved, creditors will not be able
to test the plan’s financial data until after
voting materials are approved, though the information will be
released before the vote is held.
There has been a degree of tension between Molycorp
bondholders and unsecured lenders in recent months, with many
protesting that the company had capitulated to demands by its
senior lender, Oaktree Capital LLC, and abandoned its duty to
steer the best course out of bankruptcy.
Although Molycorp and Oaktree deny the claim, Judge
Christopher Sontchi has since ordered them into mediation with
the other creditors.
Molycorp’s proposed dual-track method of
bankruptcy exit means it will either be split up and sold in
segments or undergo a debt "haircut", before being
Rare Earths News Review
Ossen sees margins rise
In Shanghai, China, Ossen Innovation Co. Ltd posted a 7.6%
rise in margins to $30m for Q3 2015, compared to the equivalent
period in 2014.
The coatings company, which uses zinc and rare earths to
surface pre-stressed steel materials for bridges and other
infrastructure projects, also recorded net income growth of
601% year-on-year (y-o-y), to $3.3m.
"While our revenues grew by 7.6% y-o-y, gross margin,
operating margin and net earnings all reached the highest
levels in four years as a result of low material costs and
strong sales volume across all major product categories that
more than offset decline in average selling prices," Liang
Tang, Ossen Innovations’ chairman said.
Positive results from
Medallion Resources samples
TSX-V-listed Medallion Resources Ltd has received positive
feedback from processing companies regarding its mixed rare
earth concentrate product samples.
"Based on those responses, it is clear that this concentrate
product, once capable of being produced in commercial
quantities, is suitable for input into standard commercial rare
earth refineries or separation plants," Medallion said.
"This is a welcome and expected response as well as
validation of our approach. Rare earth processing can be
technically challenging, so we have taken a straightforward
approach to get to production. Our strategy is to purchase by
product monazite sand. This will serve as a high-grade
feedstock for our planned commercial extraction plant," Don
Lay, Medallion’s CEO, added.
Tasman Metals completes pilot
TSX-V-listed Tasman Metals Ltd has completed a
beneficiation pilot plant test on mineralised rock from the
company’s Norra Karr heavy rare earths project in
Run at the Geological Survey of Finland in Outokumpu, tests
used a 6.5 tonne sample of rock, from which 5.6 tonnes was
crushed, ground and magnetically separated according to
Tasman’s PFS flow sheet.
Scavenging magnetic testing was also carried out to
ascertain enhanced recovery; 79% yttrium recovery was achieved
in a mass of 34.8%.
The pilot plant produced around 1.9 tonnes eudialyte/REE
enriched mineral concentrate, in addition to 3.7 tonnes of
nepheline and feldspar byproduct.
Mkango Resources published PFS
Mkango Resources Ltd has published an updated prefeasibility
study (PFS) for its Songwe Hill rare earths project in Malawi,
which outlined an after tax net present value (NPV) of $345m
and an after tax internal rate of return (IRR) of 37%, based on
a value of $59.8/kg rare earth oxide (REO).
The company said that initial capex for the project is among
the lowest in the rare earth sector at $216m, including a
contingency of $20m.
Production from the mine is expected at 2,841 tpa REO in
mixed chemical concentrate over an 18-year mine life. Cash
operating costs have meanwhile been estimated at $13/kg for the
first 5 years of production and $16.4/kg REO for the life of
"The market review, completed in conjunction with the
updated PFS, validates our strategy and focus on the 'big
four’ magnet rare earths, which have a strong
market outlook, geared to China’s emerging green
economy and growing consumer demand, and make up over 80% of
our potential future revenue," the company’s CEO,
William Dawes, said.