The Mountain Pass rare earths mine, once the shining star of the United States mining sector, and a major source of vital rare earths in the nation will be going up for auction in bankruptcy court in March, according to papers filed Tuesday in the U.S. Bankruptcy Court in Wilmington, DE.
The Wall Street Journal reported that a company identified as Rare Earth Global Partners has submitted an opening offer of $40 million for the mine.
The mine was at the heart of a meteoric rise by former owner Molycorp in 2010 when the company went public. Molycorp’s stock sky rocketed and subsequently crashed leading to bankruptcy in June 2015.
Up for sale is land and some equipment at the mine, according to court papers. Mineral rights at the site belong to an entity called Secured Natural Resources LLC, which is owned by creditors of the mine’s former owner, Molycorp Inc., including JHL Capital Group LLC.
The sale plan is the product of months of work by bankruptcy trustee Paul Harner, who was left with the Mountain Pass Mine at the end of the contentious bankruptcy proceeding of its former parent, Molycorp.
Developed at a cost of about $1 billion, the open pit mining operation was part of Molycorp’s grand plan to have both production and processing capability for rare earths, at a time when prices were high.
Rare earths are scarce elements used in trace amounts in electronics. China is the world’s largest supplier, and, for a time, pursued policies that fueled fears of a global scarcity, driving up prices.
A switch in trade policy from China upended Molycorp’s business model, and sent the company into bankruptcy in June 2015. The Neo processing business remained profitable, but the Mountain Pass Mine became a cash drain on the struggling company, and was idled.
Last year, Molycorp’s rare earths processing business emerged as the core of a reorganized company, Neo Performance Materials. However, the Mountain Pass mine was left behind in bankruptcy court, freighted with environmental liabilities.