* Developing heavy rare earth deposit near Mountain Pass
* Exploring three other heavy projects, watching others
* Exec says not ruling out Rare Element's Bear Lodge
* Shares up 7.9 pct at $32.50 on NYSE
By Julie Gordon
Oct 4 Molycorp MCP.N is developing a new
deposit near its Mountain Pass mine in California that could
enable the company to produce more of the valuable heavy
rare-earth metals used in hybrid cars and wind turbines.
The project, which the company will announce at a
conference in Washington on Tuesday, is the first of four new
heavy rare-earth deposits that the company is exploring, its
chief technology officer, John Burba, told Reuters.
In the past industry experts have raised questions about
the Colorado-based company's reserve profile, saying it leaned
too much on more abundant light rare earths.
Molycorp's stock rose 7.9 percent to $32.50 on Tuesday
after the find was reported initially by The New York Times.
Exploration at the deposit is still in early stages, Burba
said, adding that the overall grade is richer than average, at
4 to 6 percent, with high concentrations of terbium,
dysprosium, europium and neodymium.
Heavy rare earths such as terbium and dysprosium are
scarcer than cerium and other light rare earths, making them
much more valuable.
"This deposit does not have the highest heavy rare earth
distribution of the ones that we're looking at," he said. "But
it is the one we were interested in right off because it is
very close to Mountain Pass."
Prices of the individual oxides and metals have spiked as
China, which produces some 95 percent of the world's supply,
has repeatedly clamped down on exports.
Ore from the new project could feed directly into the
processing facilities being built at Mountain Pass, said Burba,
where Molycorp is in the process of a $781 million
modernization and expansion.
A secure supply of heavy rare earths, used to make large
permanent magnets for wind turbines and hybrid cars, would
allow the company to move forward with a strategy to produce
the entire rare earth chain, from mine to magnets.
"It's a pretty encouraging deposit," said Burba. "We're
moving with great speed to get this thing defined and start
While Molycorp continues to watch all rare earth projects
being developed in North America and around the world, it is
not working with any junior mining companies on the four
deposits it is currently exploring, Burba said.
He listed overall grade, a high occurrence of heavies and
location as the key factors in determining a project of
interest, all criteria that would fit Rare Element Resources'
RES.TO Bear Lodge deposit in Wyoming.
"I'm not going to rule out Bear Lodge," said Burba. "But I
am going to say that we're focusing on the ones that are most
interesting to us."
Rare earths are used to produce a range of green-energy
technologies, including compact fluorescent light bulbs and
(Reporting by Julie Gordon)