* Q1 loss $0.33 vs loss $0.07 year earlier
* Revenue rises to $146.4 million from $84.5 million
May 9 U.S. rare earths producer Molycorp Inc
said on Thursday that it had a wider loss in the first
quarter after higher costs and weak rare earth prices, which it
said had declined more in recent weeks.
The company reported a loss attributable to common
shareholders of $50.1 million, or 33 cents a share, compared
with a loss of $6.3 million, or 7 cents, a year ago. Revenue
rose to $146.4 million from $84.5 million.
Molycorp is nearing completion of a $1.25 billion
modernization and expansion at its main mine, Mountain Pass, in
California. A new processing facility there is expected to
reach full production by mid-year, but a "chlor-alkali" plant at
the mine that would enable Molycorp to cut costs by recycling
some of the chemicals it needs is not due to start operating
until later in the year.
Until that plant is online, the company will be unable to
sufficiently cut costs. For that reason, Chief Executive
Constantine Karayannopoulos told analysts, investors and media
on a conference call that the company may cut production at the
Produced primarily in China, rare earths are essential for
making high-tech products like smartphones, tablets, hybrid
vehicles and automotive catalysts.
Asked if the company was considering asset sales,
Karayannopoulos said they were not a top priority, but he did
not rule them out.
"I'm not saying this is what we are going to be doing but
... you should not be surprised if you find out that in the next
few months, as our ongoing evaluation continues, we are slowing
down, shutting down, or disposing of assets," he said.
"It is imperative that we closely manage our cash flows," he
said. "After we achieve our full production run rate, it may
make sense to dial back production until we can run the facility
at a lower cost."
Rare earths prices skyrocketed in 2010 and early 2011 as
China clamped down on exports, prompting a global rush to secure
supplies. China has eased export controls since then and prices
Molycorp's acquisition of Canada's Neo Materials, which
closed in June 2012, gave the miner access to processing
capabilities and patents, making it the only major North
American player with the ability to both mine and process rare
Weak prices and high costs have weighed on the company's
results, and in the fourth quarter of last year it took a $258.3
million impairment charge related to the takeover.
In the first quarter of this year, excluding inventory
write-downs and other items, the company recorded a loss of
$20.3 million, or 15 cents a share, compared with adjusted
earnings of $18.3 million, or 18 cents, a year earlier.
Analysts, on average, had expected a loss of 27 cents a
share, according to Thomson Reuters I/B/E/S.