Monday, April 18, 2011

Molycorp (MCP) Acquires Santoku America

In a bid to become the major supplier of rare earths outside of China, Molycorp (NYSE:MCP) announced it will acquire Arizona-based Santoku America, Incorporated.

Santoku, which will operate as Molycorp subsidiary under the name Molycorp Metals and Alloys, is a maker a rare earth metals and alloys.

"This puts us in a unique position in that we will be making alloys as Molycorp on US soil," CEO Mark Smith said.

"We are watching what the Chinese are doing very, very carefully," Smith added. "They are moving downstream into these rare earth businesses as well. That's where the real competition will be. If we are not capable of competing beyond (rare earth) oxides, we will lose out in the long run."

Molycorp has been on an acquisition spree, and "Opportunities continue to be endless," Smith noted. "I want to continue to build this supply chain for mines to magnets.

"We will go as far down stream as we have to, to make sure we are a legitimate blue chip player in this industry."

Earlier in April Molycorp announced they were acquiring a controlling interest in AS Silmet, based in Europe, and one of only two rare earth firms operating in the region.

Molycorp paid $17.5 million Santoku America. Molycorp, which has soared over 500 percent over the last year, was trading at $75.19, gaining $0.97, or 1.31 percent, as of 12:51 PM EDT.

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