Column: In search of the elusive green nickel premium
Just about every Western producer will tell you metal produced to higher environmental and social standards should command a premium.
Molycorp, Inc. (NYSE: MCP), the Western hemisphere’s only producer of rare earth oxides, today announced the award of an Engineering, Procurement, and Construction (EPC) contract by a wholly owned subsidiary to KBR (NYSE: KBR) to build a Chlor-Alkali plant as part of Molycorp’s state-of-the-art, $781 million Project Phoenix expansion and modernization at its flagship rare earth facility at Mountain Pass, Calif.
“The innovative use we will make of this highly reliable technology will help position Molycorp to be both environmentally superior in our rare earth manufacturing as well as the world’s lowest-cost producer.”
The Chlor-Alkali facility will be used in a highly innovative way to allow Molycorp to recycle virtually all of the water used in the chemical separation of individual rare earth elements at Mountain Pass. The Chlor-Alkali process also is key to Molycorp’s ability to recycle the chemical reagents needed in rare earth oxide manufacture. Such recycling will greatly reduce the environmental footprint of U.S. rare earth production at Mountain Pass, as well as help to position Molycorp as the world’s lowest-cost producer of high-purity rare earth oxides beginning in 2012.
“We are pleased to be achieving another significant milestone in Project Phoenix with this contract award, and to be moving forward with the construction of our Chlor-Alkali facilty,” said Dr. John L. Burba, Chief Technology Officer and Executive Vice President for Molycorp. “The innovative use we will make of this highly reliable technology will help position Molycorp to be both environmentally superior in our rare earth manufacturing as well as the world’s lowest-cost producer.”
About Molycorp
Colorado-based Molycorp, Inc. is the only rare earth oxide (REO) producer in the Western Hemisphere and the largest REO producer outside of China. The company currently is expected to produce a total of between 4,541 to 5,813 metric tons of commercial rare earth materials in 2011 from its three facilities. In addition to its flagship rare earth mine and processing facility at Mountain Pass, California, Molycorp also owns a controlling interest in the Estonia-based Molycorp Silmet AS. One of the largest rare earth and rare metal producers in Europe, Molycorp Silmet AS has an annual production capacity of approximately 3,000 metric tons of rare earth products and 700 metric tons of rare metal products. Molycorp also owns Molycorp Metals and Alloys in Tolleson, Arizona. Formerly known as Santoku America, Inc., the facility is one of the leading producers of high-purity rare earth alloys and metals outside of China, and manufactures neodymium-iron-boron (NdFeB) alloy and samarium cobalt (SmCo) alloy, as well as other specialty alloys and products. Following the execution of Molycorp’s “mine-to-magnets” strategy and the expected 2012 completion of Phase 1 of its modernization and expansion efforts at its Mountain Pass, California processing facility, Molycorp expects to produce at a rate of approximately 19,050 metric tons of REO equivalent per year from Mountain Pass. The Company expects to achieve an annual production capacity at Mountain Pass by the end of 2013 of approximately 40,000 metric tons of REO equivalent after the completion of Phase 2. Molycorp intends to provide to the market a range of rare earth products, including high-purity oxides, metals, alloys, and permanent magnets. The company currently sells products to customers in Europe, North and South America, Asia, Russia, and other previous Soviet Union countries.
About KBR
KBR is a global engineering, construction and services company supporting the energy, hydrocarbon, government services, minerals, civil infrastructure, power, industrial, and commercial markets. For more information, visit www.kbr.com.
