Molycorp CEO says rare earths demand, prices off lows
(Reuters) - Rare earths producer Molycorp Inc (MCP.N) has seen demand and prices for its products rise from their second-quarter lows, the company's chief executive said on Thursday, although the company reported a wider third-quarter loss.
A Chinese government crackdown on illegal mining and smuggling of rare earths has helped "a semblance of stability" return to industry demand and prices, Constantine Karayannopoulos, the company's interim CEO, said.
Produced primarily in China, rare earths are an essential part of many high-tech products including smartphones, tablets and hybrid vehicles. Prices skyrocketed in 2010 and early 2011 as China clamped down on exports, but it then eased export controls causing prices to drop steeply.
"We haven't gotten what I would consider an historical normal yet. But it certainly looks and feels like we are on our way towards that," Karayannopoulos said in an interview.
He said the second quarter was the "worst quarter we have seen in recent memory."
Molycorp on Thursday reported a third-quarter loss attributable to common shareholders of $65.5 million, or 43 cents a share, compared with a loss of $11.5 million, or 19 cents, a year earlier.
Excluding items such as inventory write-downs, the company reported an adjusted loss of $45.9 million, or 27 cents a share, compared with a loss of $6.1 million, or 5 cents, a year earlier.
Revenue fell to $149.1 million from $205.2 million in the third quarter of 2012. But revenue was up 9 percent from the second quarter.
Analysts, on average, had expected a loss of 29 cents a share at the Greenwood Village, Colorado-based company, on revenue of $161 million, according to Thomson Reuters I/B/E/S.
Karayannopoulos said the ramp-up of Molycorp's main mine, Mountain Pass in California, is still on track for full commissioning in the current quarter. The $1.25 billion Mountain Pass expansion could make Molycorp much more competitive on price.
Geoff Bedford, Molycorp's current chief operating officer, will take over as CEO on December 2.
Molycorp shares ended down 1.2 percent at $4.76 on the New York Stock Exchange on Thursday ahead of the results. The stock has fallen about 48 percent this year.
(Editing by Richard Chang and Leslie Adler)