Rare Earth Supply Chain

Filed in archive Green supply chain on October 28, 2011

© Rameshng

Molycorp is a US based producer of rare earth metals and owner of the largest rare earth mine outside of China. Seeking to expand its operations across the rare earth supply chain, Molycorp recently paid $17.5 million to Japan-based Santoku for its US subsidiary based in Arizona.

This acquisition gives Molycorp the ability to manufacture finished products from the rare earth metals produced from its mines. These products are primarily neodymium iron boron magnets which are essential in clean technology applications including hybrid, electric vehicles, permanent magnet wind turbines and solid oxide fuel cells. Japanese companies in particular are faced with a significant supply risk brought about by an enormous demand for rare earths and a reliance on the Chinese rare earth metals production industry. Molycorp has been popular with investors in the wake of China's decision to place strict caps on exports of rare earth metals. As China currently accounts for 95% of global rare earth production, this move has caused rare earth prices to skyrocket.