Molycorp, a U.S.-based supplier of rare earth minerals, said today it has acquired a processing facility to manufacture metals for use as magnets from its minerals used in many green-technology products.
The company paid $17.5 million to Japan-based Santoku for its Arizona-based Santoku America, which has a facility that can make neodymium iron boron (NdFeB) alloys from the minerals mined at Molycorp's Mountain Pass, Calif., facility. Molycorp on Wednesday plans to host a ground-breaking event at the mine, which has been closed since the 1990s.
The acquisition gives Molycorp the ability to make some products for the minerals it mines. Santoku will act as a distributor for the specialty alloys made at the Arizona facility.
Rare earth metals have risen in prominence over the past year after China restricted exports to Japan and demand for rare earth metals has risen. Chinese operations now supply about 95 percent of rare earth metals, but now other countries are seeking to open other mines and find techniques, such as recycling, to ensure supply. Molycorp's reopened mine will be the only one in the U.S.
Neodymium iron boron magnets are strong permanent magnets used in many products including hybrid cars, advanced direct-drive wind turbines, and electronics. Molycorp's newly acquired Arizona manufacturing plant will also process samarium cobalt (SmCo) magnets which are used in defense applications.
Other rare earth metals are used in efficient lighting products, computer disk drives, and military air craft. Rare earths are a specific group of elements, but there are a number of other materials, such as indium or lithium, that are considered vital for energy and high-tech industries.
As part of its expansion plans, Molycorp earlier this month paid about $89 million for a majority stake in AS Silmet, a rare-earth processing facility in Europe.
Updated at 2:07 p.m. to clarify that Santoku manufactures alloys.