CHICAGO (Reuters) - The top executive of rare earth mining company Molycorp Inc MCP.N said on Thursday his company is in discussions with a number of potential joint venture partners and customers scrambling to find other suppliers of the critical minerals in the wake of China’s supply cut.
In an interview with Reuters, Molycorp Chief Executive Mark Smith said the company was “absolutely” in negotiations to reach deals similar to the ones it announced earlier this month with Hitachi Metals Ltd (5486.T) and Sumitomo Corp (8053.T).
“Absolutely we are,” he said. “And that can be anything from things that are similar to the Sumitomo deal, things that are similar in terms of joint venture downstream activities like we’re doing with Hitachi, and just simple offtake agreements with customers as well.
“Let me put it this way ... In my almost 25 years in this business — I have never seen the number of opportunities that are available like they are today.”
Prices have surged for rare earth minerals, used in everything from iPods to fluorescent light bulbs, since authorities in Beijing slashed their rare earth exports by 40 percent this summer, saying China needed them for its economic development.
Then this week, the Chinese government announced it was cutting its rare-earth mineral export quotas again.
Japanese companies, which bear the brunt of China’s action, have been scrambling to secure reliable supplies of the minerals.
Last week, Hitachi Metals signed a joint venture with Molycorp to help ensure a steady supply of the minerals.
That followed word earlier this month that Sumitomo agreed to invest $130 million in Molycorp to secure a seven-year supply of the materials.
Since debuting in late July at $14, Molycorp’s stock has nearly quadrupled in value.
Shares of the company closed up 5.46 percent at $51.99 on the New York Stock Exchange.
Reporting by James B. Kelleher; Editing by Bernard Orr