Molycorp, Daido Steel, & Mitsubishi Corporation Announce Joint Venture To Manufacture Sintered NdFeB Rare Earth Magnets
Joint Venture Has Been Provisionally Awarded a Magnet Supply
Agreement with a Major Automobile Manufacturer
Molycorp, Inc. (NYSE: MCP) (Molycorp), Daido Steel Co., Ltd. (Daido),
and Mitsubishi Corporation (Mitsubishi) today announced the formation of
a joint venture to manufacture and sell next-generation
neodymium-iron-boron (NdFeB) permanent rare earth magnets.
The joint venture will manufacture sintered NdFeB permanent rare earth
magnets with technology licensed from Intermetallics, Inc., a
partnership between Mitsubishi, Daido, and Dr. Masato Sagawa,
co-inventor of the NdFeB magnet. The capital contribution ratio of the
newly formed company will be 30.0% by Molycorp, 35.5% by Daido, and
34.5% by Mitsubishi. The joint venture will be financed by the three
shareholders and by a government subsidy sponsored by Japan′s Ministry
of Economy, Trade, and Industry (METI).
The joint venture plans to construct an initial 500 metric-ton-per-year
magnet manufacturing facility in Nakatsugawa, Japan (Gifu Prefecture),
with operations expected to commence by January 2013. The companies
expect to begin work on the new facility next month and eventually
expand operations in the U.S. and elsewhere.
The technology to be used by the joint venture is a new and novel
approach that does not depend on the use of patents held by other magnet
companies. The technology allows for the manufacture of permanent rare
earth magnets that deliver greater performance with less reliance on
dysprosium, a relatively scarce rare earth. The process also results in
higher production yields.
Made with the rare earths neodymium, praseodymium and dysprosium (or
terbium), NdFeB magnets are the world′s most powerful permanent magnets
and are key components in many advanced technologies, including
high-performance motors used in the power trains of electric vehicles,
hybrid vehicles and wind power generators, as well as in motors in home
appliance and industrial applications. Electric motors are estimated to
use approximately 45 percent of global power consumption, according to
the International Energy Agency. Using NdFeB magnets in motors can help
reduce electric power consumption by 20 percent and would contribute to
reducing global CO2 emissions by an estimated 1.2 billion
tons.
Target markets for the joint venture are the automotive and home
appliance markets. These markets, as well as other markets for
environmentally friendly technologies, are forecast to be significant
drivers of demand growth for permanent rare earth magnets. The joint
venture has been provisionally awarded a supply agreement for a
next-generation electric vehicle with a major automotive manufacturer.
The new company will engage in the manufacturing and sale of
next-generation NdFeB magnets and will take full advantage of Daido′s
commercial-scale magnet manufacturing technologies, Mitsubishi′s
domestic and international marketing and sales network, and Molycorp′s
rare earth oxide, metal, and alloy manufacturing resources and
capabilities.
According to the independent market analysts at Roskill, China currently
supplies approximately 94 percent of world′s demand for rare earths.
Export restrictions and other controls by China have made procurement of
stable supplies difficult, which underscores the importance of
Molycorp′s ability to provide the joint venture with stable supplies of
rare earth materials for magnet manufacturing.
'I am happy and very honored that Molycorp is able to partner with these
extraordinary companies, who are global leaders and innovators in so
many areas,? said Mark A. Smith, President and CEO of Molycorp.
'Molycorp also is pleased that the joint venture can break ground almost
immediately and will be able to produce some of world′s most powerful
rare earth magnets in as little as 14 months.?
Smith added: 'The next-generation magnet manufacturing technologies
being utilized by the joint venture are a perfect complement to the
advanced technologies Molycorp is deploying across our own rare earth
manufacturing supply chain. This initiative is a major milestone in
Molycorp′s mine-to-magnets strategy and continues our strong focus on
technology innovation, efficiency, and operational excellence.?
About Molycorp, Inc.
With offices in the U.S., Europe, and Japan, Molycorp, Inc. is the
largest rare earth oxide (REO) producer outside of China. In addition to
its current production of rare earth oxides at its flagship rare earth
mine and processing facility at Mountain Pass, California, the Company
produces rare earth metals, rare earth alloys (such as
neodymium-iron-boron and samarium-cobalt alloys) and rare metals such as
niobium and tantalum. The rare earths and rare metals Molycorp produces
are critical inputs in existing and emerging applications including:
clean energy technologies, such as hybrid and electric vehicles and wind
power turbines; multiple high-tech uses, including fiber optics, lasers
and hard disk drives; numerous defense applications, such as guidance
and control systems and global positioning systems; advanced water
treatment technology for use in industrial, military and outdoor
recreation applications; and other technologies. For more information
please visit ?www.molycorp.com.
About Daido Steel
Daido Steel Co,, Ltd. ranks as the world's latest manufacturers of
specialty steel. With a history dating back to 1916, the Company has
accumulated extensive skills in combining steel scrap with other
materials to achieve the strength, workability, and other
characteristics to match exacting requirements. Along with the
manufacture of value-added steel, the Company offers many services that
leverage its technological resources. Most services target high-end
market sectors that demand the highest levels of quality and
specialization. Daido Steel is one of the leading players worldwide in
the manufacture of critical steel components where nothing less than
absolute reliability is acceptable. These components include automobile
transmissions and engine parts as well as components used in ships,
aircraft, and electric generators. Daido Steel shares are traded on the
First Section of the Tokyo Stock Exchange under the securities code 5471.
About Mitsubishi Corporation
Mitsubishi Corporation (MC) is a global integrated business enterprise
that develops and operates businesses across virtually every industry
including industrial finance, energy, metals, machinery, chemicals,
foods, and environmental business. MC's current activities are expanding
far beyond its traditional trading operations as its diverse business
ranges from natural resources development to investment in retail
business, infrastructure, financial products and manufacturing of
industrial goods. With over 200 bases of operations in approximately 80
countries worldwide and a network of over 500 group companies, MC
employs a multinational workforce of nearly 60,000 people.
About Dr. Masato Sagawa
Dr. Masato Sagawa received his bachelor and master degrees in electric
engineering from Kobe University in 1966 and 1968, respectively, and his
doctoral degree in materials engineering from Tohoku University in 1972.
He joined the Fujitsu Company in 1972, where he was assigned to develop
magnetic materials for electric relays. In 1982 he joined Sumitomo
Special Metals (SSM) where he accomplished the invention of the NdFeB
sintered magnets. Dr. Sagawa′s honors include the Osaka Prize in 1984,
American Physical Society International Prize for New Materials in 1986,
Asahi Prize in 1990, Japan Magnetics Society Award in 1991, Honda-kinen
Prize in 2003, etc.
Safe Harbor Statement Regarding Forward-Looking Statements
This release contains forward-looking statements that represent
Molycorp′s beliefs, projections and predictions about future events or
Molycorp′s and the proposed sintered NdFeB rare earth magnet joint
venture′s future performance. Forward-looking statements can be
identified by terminology such as 'may,? 'will,? 'would,? 'could,?
'should,? 'expect,? 'intend,? 'plan,? 'anticipate,? 'believe,?
'estimate,? 'predict,? 'potential,? 'continue? or the negative of these
terms or other similar expressions or phrases. These forward-looking
statements are necessarily subjective and involve known and unknown
risks, uncertainties and other important factors that could cause
Molycorp′s actual results, performance or achievements or industry
results to differ materially from any future results, performance or
achievement described in or implied by such statements.
Factors that may cause actual results to differ materially from expected
results described in forward-looking statements include, but are not
limited to: Molycorp′s ability to secure additional capital to implement
its business plans; Molycorp′s ability to complete its initial
modernization and expansion efforts, including the accelerated start-up
of the Mountain Pass facility, which management refers to as Project
Phoenix Phase 1, and the second phase capacity expansion plan, which
management refer to as Project Phoenix Phase 2, and reach full planned
production rates for REOs and other planned downstream products; the
final costs of the Project Phoenix Phase 1, including with accelerated
start-up of the Mountain Pass facility, and Project Phoenix Phase 2,
which may differ from estimated costs; uncertainties associated with
Molycorp′s reserve estimates and non-reserve deposit information;
uncertainties regarding global supply and demand for rare earths
materials; Molycorp′s ability to successfully integrate recently
acquired businesses; completion of the formation of the proposed
sintered ndFeB rare earth magnet joint venture, which remains subject to
the satisfaction of customary closing conditions; the proposed sintered
NdFeB rare earth magnet joint venture′s ability to successfully
manufacture magnets within its expected timeframe; Molycorp′s ability to
maintain appropriate relations with unions and employees; Molycorp′s
ability to successfully implement its 'mine-to-magnets? strategy;
environmental laws, regulations and permits affecting Molycorp′s
business, directly and indirectly, including, among others, those
relating to mine reclamation and restoration, climate change, emissions
to the air and water and human exposure to hazardous substances used,
released or disposed of by Molycorp; and uncertainties associated with
unanticipated geological conditions related to mining.
For more information regarding these and other risks and uncertainties
that Molycorp may face, see the section entitled 'Risk Factors? of the
Company′s Annual Report on Form 10-K for the year ended December 31,
2010 and of the Company′s Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 2011. Any forward-looking statement
contained in this press release or the Annual Report on Form 10-K or the
Quarterly Report on Form 10-Q reflects Molycorp′s current views with
respect to future events and is subject to these and other risks,
uncertainties and assumptions relating to Molycorp′s operations,
operating results, growth strategy and liquidity. You should not place
undue reliance on these forward-looking statements because such
statements speak only as to the date when made. Molycorp assumes no
obligation to publicly update or revise these forward-looking statements
for any reason, or to update the reasons actual results could differ
materially from those anticipated in these forward-looking statements,
even if new information becomes available in the future, except as
otherwise required by applicable law.
MOLYCORP
Jim Sims, +1-303-843-8062
Vice
President Corporate Communications
Jim.Sims@Molycorp.com
or
Brian
Blackman, +1-303-843-8067
Senior Manager, Investor Relations
Brian.Blackman@Molycorp.com
or
DAIDO
STEEL CO., LTD.:
Corporate Planning Dept., +81-52-963-7516
publicity@ask.daido.co.jp
or
MITSUBISHI
CORPORATION:
Corporate Communications Dept.,
+81-3-3210-2511
takashi.shiwaku@mitsubishicorp.com
