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Molycorp signs supply agreement with Hitachi Metals.

M2 EQUITYBITES-August 15, 2011-Molycorp signs supply agreement with Hitachi Metals(C)2011 M2 COMMUNICATIONS

Molycorp Inc (NYSE:MCP), producer of rare earth oxides (REO), has reached a three-year agreement with Hitachi Metals for an undisclosed amount whereby Hitachi will supply Molycorp with rare earth magnetic materials including Didymium (a mix of neodymium and praseodymium) metal and alloy and Lanthanum Oxide, it declared on Friday.

Additionally, the deal will extend and expand the existing supply relationship between the two parties and increase the amount of rare earth materials that Molycorp will provide Hitachi Metals when Molycorp reaches its Phase 1 production level in 2012 at its main rare earth production facility at Mountain Pass, California.

Molycorp's new supply relationship with Hitachi shows the progress it has made to develop its downstream manufacturing capabilities and combined with the production at its Arizona facilities, it will produce the required upgraded magnetic materials to meet a big part of Hitachi Metals' global requirements when Molycorp reaches its full, Phase 1 production levels at Mountain Pass.

In a separate announcement, Molycorp and Hitachi Metals said that jointly they are suspending discussions for their December 2010 letter of intent for a joint venture in the US to manufacture neodymium-iron-boron (NdFeB) alloy and permanent magnets made from the alloy as they were unable to reach agreement on certain key matters.

Financial details were not provided.

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Publication:M2 EquityBites (EQB)
Date:Aug 15, 2011
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