Molycorp and Hitachi Metals agree to pursue forming JVs to manufacture rare earth alloys and magnets in US
21 December 2010
Molycorp, Inc. and Japan-based Hitachi Metals, Ltd. have entered into an agreement regarding the planned formation of joint ventures for the production of rare earth alloys and magnets in the US. The ventures would be focused on the manufacture of neodymium-iron-boron (NdFeB) alloys and magnets that are critical to many clean energy, automotive, computer, health care, communications and other technologies.
The parties are expected to sign definitive agreements, which are subject to the satisfaction of certain conditions, for the alloy joint venture by early April 2011. Signing of definitive agreements, subject to the satisfactory conclusion of the feasibility study and other conditions, for the joint venture to produce rare earth magnets would follow later in 2011.
Colorado-based Molycorp, Inc. is the only rare earth oxide (REO) producer in the Western Hemisphere and currently produces approximately 3,000 metric tons of commercial rare earth materials per year. Following the execution of Molycorp’s “mine-to-magnets” strategy and the expected completion of its modernization and expansion efforts at its Mountain Pass, California processing facility by the end of 2012, Molycorp expects to produce at a rate of approximately 20,000 metric tons of REO equivalent per year and intends to offer a range of rare earth products, including high-purity oxides, metals, alloys, and permanent magnets.
Good idea.
Posted by: HarveyD | 21 December 2010 at 11:13 AM
Wall Street has responded to all of this. The fact that we have so few producers in the U.S. tells the story in another way. Reaction to market conditions is slow. Planning and ongoing investment is usually better than reacting and scrambling.
Posted by: SJC | 21 December 2010 at 07:08 PM
Molycorp and Hitachi Metals has responded to a developing shortage.
The reason we have so few producers in the Western Hemisphere is because there was insufficient profit in competing with the existing sources.
The government reaction to market conditions is slow or non-existant. Politics and earmarks takes precedence over [over what].
Over PLANNING?
By politicians?
PLANNING?
What planning?
Favoritism, politics and earmarks is where all the effort is.
Profit and the free market are what drives our world.
Unless you don’t work for a living.
Or refuse to accept any profit or wages.
Or maybe if you work for the government or belong to a strong union.
Or you are in Cuba or North Korea.
Posted by: ToppaTom | 21 December 2010 at 09:37 PM
I sounds like you are opposed to planning at all, you prefer chaos.
Posted by: SJC | 21 December 2010 at 09:58 PM
We'll need tariffs on Chinese magnets to keep them from using predatory pricing to kill efforts like this. If China wants to manipulate trade to its advantage, it doesn't deserve free access to markets.
Posted by: Engineer-Poet | 22 December 2010 at 07:48 AM
E-P: We have done that (trade manipulation) for decades and centuries. It's now China's turn to do it to us and others like us. They have learned from us. Since they are 4 times has many they can eventually to it four times harder and it will hurt much more in the years to come.
Tariffs will not work for extended periods, specially from the number one free trade advocate. The base reasons have to be identified and long term solutions applied. Basically we have mismanaged ourselves out of the market.
Our industrial-financial model is failing. Too much greed, wild unchecked speculation, hush money and too many unfair unions-administrations, vultures, shylocks, acquired addictions, 240+M ICE vehicles.. etc is choking the nation.
The cure is not well known. A 1929 style recession is a possible remedy. More Wikileaks could also help to identify the culprits. Either way we are in for a rough ride.
In our area, Newspapers and TVs have started to investigate and declare how the underworld has bought many large construction companies, unions and politicians and have increased the cost of large public projects by 40% to 50%. A new 200 strong police squad is being used to white-wash everything. A few very small fish will be jailed but politicians and the big fish will get away with their eyes wide shut.
Posted by: HarveyD | 22 December 2010 at 08:29 AM
The market can and has responded. My point is that it is a reaction which takes time to catch up. If investments are made along the way, it is easier to stay current. When you scramble to bring in production it may take more capital and a longer period than they would like.
They are trying for a more than 6 fold increase in two years. The combination of the two companies could do it, but what if the capital and cooperation were not there? We knew that permanent magnets would be needed for hybrid cars 10 years ago. Where was the strategic and tactic response? I guess we are seeing that now.
Posted by: SJC | 22 December 2010 at 12:38 PM
Why would you say I favor chaos over planning - The politicians are the ones opposed to planning.
The government generally demonstrates excellent posturing but poor planning - except for the military. Oh, and California, which will likely buy a few gross Teslas (which use REO-free AC induction motors), and call it “planning”.
Even now, 10 years after the first serious EVs, (back when we were pushing H2 and buying Hummers) we are only guessing we might be short of REO for permanent magnets in the next 5 to 10 years (we only wish it were sooner).
And who does prepare?
Who exercises common sense planning?
- Molycorp and Hitachi Metals.
Maybe late - maybe not.
And IF there is a real need, other (evil) capitalists will do the same.
And (evil) big and small industry will search for substitutes and will improve AC induction motors.
10 and ewven 5 years ago there was no certainty of need.
Hindsight bias is a weakness not a virtue.
Posted by: ToppaTom | 24 December 2010 at 05:45 AM