2. Forward-Looking Statements
and Other Important Cautions
This presentation contains forward‐looking statements that represent Molycorp’s beliefs, projections and predictions about future events or Molycorp’s future
performance. Forward‐looking statements can be identified by terminology such as “may,” “will,” “would,” “could,” “should,” “expect,” “intend,” “plan,”
“anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue” or the negative of these terms or other similar expressions or phrases. These forward‐
looking statements are necessarily subjective and involve known and unknown risks, uncertainties and other important factors that could cause Molycorp’s
actual results, performance or achievements or industry results to differ materially from any future results, performance or achievement described in or implied
by such statements.
Factors that may cause actual results to differ materially from expected results described in forward‐looking statements include, but are not limited to:
Molycorp’s ability to secure sufficient capital to implement its business plans; Molycorp’s ability to complete its modernization and expansion efforts and reach
full planned production rates for rare earth oxides and other planned downstream products; uncertainties associated with Molycorp’s reserve estimates and
non‐reserve deposit information; uncertainties regarding global supply and demand for rare earths materials; Molycorp’s ability to maintain appropriate
relations with unions and employees; Molycorp’s ability to successfully implement its “mine‐to‐magnets” strategy; environmental laws, regulations and permits
affecting Molycorp’s business, directly and indirectly, including, among others, those relating to mine reclamation and restoration, climate change, emissions to
the air and water and human exposure to hazardous substances used, released or disposed of by Molycorp; and uncertainties associated with unanticipated
geological conditions related to mining.
For more information regarding these and other risks and uncertainties that Molycorp may face, see the section entitled “Risk Factors” in Molycorp Quarterly
Report on Form 10‐Q for the quarterly period ended September 30, 2010 filed with the SEC. Any forward‐looking statement contained in this presentation, or
the Quarterly Report on Form 10‐Q , reflects Molycorp’s current views with respect to future events and Molycorp assumes no obligation to publicly update or
revise these forward‐looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward‐
looking statements, even if new information becomes available in the future, except as otherwise required by applicable law.
This presentation also contains statistical data and estimates obtained by Molycorp from industry publications and reports generated by third parties. Although
Molycorp believes that the publications and reports are reliable, it has not independently verified such data.
THIS PRESENTATION USES THE TERM “RESOURCES” TO DESCRIBE THOSE QUANTITIES OF REE’S THAT ARE POTENTIALLY RECOVERABLE FROM ACCUMULATIONS
YET TO BE DISCOVERED. BECAUSE OF THE UNCERTAINTY OF COMMERCIALITY AND LACK OF SUFFICIENT EXPLORATION DRILLING, THE RESOURCES CANNOT BE
CLASSIFIED AS RESERVES. INVESTORS ARE ADVISED THAT THE SEC DOES NOT RECOGNIZE RESOURCES. ONLY PROBABLE AND POSSIBLE RESERVES MAY BE
DISCLOSED TO INVESTORS IN AN SEC FILING. RESOURCES HAVE A GREAT AMOUNT OF UNCERTAINTY AS TO THEIR EXISTENCE. THERE IS NO CERTAINTY THAT
ANY PORTION OF THE RESOURCES WILL BE DISCOVERED AND, IF DISCOVERED, WHETHER THEY COULD BE DEVELOPED ECONOMICALLY. THEREFORE, INVESTORS
ARE CAUTIONED NOT TO ASSUME THAT ALL OR ANY PART OF MOLYCORP’S RESOURCES EXIST, OR THAT THEY CAN BE DEVELOPED ECONOMICALLY.
ACCORDINGLY, INFORMATION CONCERNING DESCRIPTIONS OF RESOURCES CONTAINED IN THIS PRESENTATION IS NOT COMPARABLE TO INFORMATION
INCLUDED IN SEC FILINGS.
2
3. IPO Summary
Issuer: Molycorp, Inc.
Symbol/Exchange: MCP/NYSE
Shares Sold: 29,128,700
Net Capital Raised: $378.6 million
Joint Book runners: Morgan Stanley, JP Morgan
Use of proceeds: Modernization and expansion of our
Mountain Pass, CA facility, and
expansion into metals, alloys, and
magnet production.
Shares outstanding: 82,291,200
Market Cap (as of 1/20/11): $3.75 billion
3
4. Molycorp Update
Successful IPO on July 29, 2010; raised $378.6M.
Successful commercial scale operation of new processing
technologies and ramp-up to a 3,000 tons/year rate.
Construction commenced of new facility; mining re-started.
Commercial launch of cerium-based water treatment
technology: XSORBX™
Passage of a rare earth R&D bill (HR 6160) by the U.S.
House in 2010 with very strong bipartisan support;
multiple bills to be introduced in 2011.
“Mine-to-Magnets” project is on time and on budget.
4
5. Rare Earths Are Critical to
Enabling Various Technologies
Commercially
significant rare earth
elements to be
produced by Molycorp Properties Product applications
Lanthanum
Reduces
Weight
Cerium
Emissions
Praseodymium Energy
Neodymium consumption
Samarium
Allows
Dysprosium
Greater efficiency
Europium Performance
Terbium Miniaturization
Gadolinium Speed
Durability
Erbium
Thermal stability
Molycorp intends to produce all 10 of these rare earth elements commercially.
5
6. What We’ll Produce
Total REO Equivalent
REO equivalent in metric tons / year
45,000
40,000
40,000
35,000
30,000
25,000
20,000
15,000
19,050
10,000
5,000
0
3,000
2010 12 / 2012 Expansion Option*
* Depending upon market conditions. Molycorp could increase production to this extent under current
operating permits, but has not yet made any decision to do so.
6
7. What We’ll Produce
Sm, Eu, Dy, Gd, Tb
REO equivalent in kgs / year
450,000
400,000
402,790
350,000
300,000
250,000
200,000
201,395
150,000
100,000
50,000
0
2010 12 / 2012 Expansion Option*
* Depending upon market conditions. Molycorp could increase production to this extent under current
operating permits, but has not yet made any decision to do so.
7
8. Producing Essential Components
to a Diverse Set of Industries
Top Revenue Contributors
2013E1 Anticipated Market Growth
Product Finished Product End Markets Production % of 2010-2015E CAGR
Revenue
Neodymium Wind Turbines,
Neodymium Iron
Iron Boron Hybrid and Electric 8.16mm kgs 57% 14% 2
Boron alloy
Magnets Vehicles
Industrial and Drinking
Water
Cerium oxide Water Filters, and 8.21mm kgs 18% NA
purification
Autos
Samarium Cobalt Samarium
Defense, Aerospace .77mm kgs 8% 14% 2
alloy Cobalt Magnets
Nickel Metal
Electronics, Hybrid
Lanthanum metal Hydride 2.49mm kgs 7% 16.4% 3
Vehicles
Batteries
4
Lanthanum oxide Catalysts FCC Catalysts 3.1mm kgs 4% 4.8%
Molycorp is well-positioned to capitalize on a variety of high-growth technologies
Source: IMCOA
1 Based on assumed prices used by SRK report dated April 2010. Actual prices and percentage of revenue could vary materially.
2 Represents anticipated market growth for REOs used in magnets
3 Represents anticipated market growth for REOs used in metal alloys
4 Represents anticipated market growth for REOs used in catalysts
8
9. Robust Expected Demand Growth
Driven by Rapidly Expanding
End-Markets
2010E REO Demand by Application 2010E–2015E End-Market Demand CAGR (REO)
Ceramics Others
6% Catalysts
6% 19.5% Metal Alloys 16.4%
Phosphors
7%
Glass 8%
Magnets 14.0%
Magnets Polishing
9.6%
21% powder
Polishing 15%
Metal Alloys
17.5% Phosphors 7.1%
2015E REO Demand by Application 5.2%
Ceramics
Ceramics Others Catalysts
4.5% 4.5% 15.5%
Phosphors Catalysts 4.8%
6%
Glass 6%
Glass
1.8%
additives
Magnets Other 5.2%
25% Polishing 15%
Metal Alloys
23.5%
2010E Total 2010E – 2015E Total Growth 2015E Adj. Total
125,000 mt REO 64% 205,000 mt REO
Source: IMCOA
Note: Totals may not add to 100% due to rounding
9
10. Rare Earths Are Critical Inputs for the
Hybrid and Electric Vehicles Market
Hybrid and Electric Vehicles Annual Hybrid and Electric Vehicle Sales (000’s)
Demand Drivers: Hybrid Vehicles Electric Vehicles 3,206
Intensive use of rare earths in hybrid 2,559
2,974
and electric vehicles are compounding 2,247
the traditional use of rare earths
1,775
1,270
962
Hybrid and electric vehicles contain 9-
11 kgs of rare earths
Anticipated rare earth demand from 2010f 2011f 2012f 2013f 2014f 2015f 2016f
hybrid and electric vehicles is Source: JD Power and Associates
estimated to grow significantly
Total Rare Earth Metal Alloys Consumption (ktpa)
52.0
22.3
2010f 2015f
Source: IMCOA
10
11. Wind Turbines Are a Significant Driver
for Rare Earth Magnet Growth
Wind turbine demand drivers
Global commitment to increasing the presence of wind energy:
U.S. EIA estimates >3x increase in installed wind
generation 2010-30 to 490GW
China is estimated to have allocated >$150bn to become
the world’s wind leader
Growing European use of offshore wind generation
Permanent rare earth magnets are used in generators of wind
turbines
Increased reliability and efficiency – reduces expensive
breakdowns and maintenance expenditures
Critical element for 3MW+ and off-shore turbine segments
With the expected JV, Molycorp would have access to the raw
Permanent Each 3MW permanent magnet
rare earth materials, IP and technical expertise to be a world-class
turbine requires approximately
magnet in one metric ton of neodymium
supplier of permanent magnets
generator iron boron magnets1
Wind turbine production (GW) REO consumption for magnets (ktpa)
North America Europe Asia Other Magnets Consumption Wind Turbine Impact
600
490
500 54.0
397
8.0
400 319
300 249 26.3
200 159 46.0
100 61 26.3
0
2006 2010F 2015F 2020F 2025F 2030F 2010f 2015f
Source: Energy Information Administration Source: IMCOA
1 IMCOA estimates each megawatt requires 0.4 tons of NdFeB magnets Note: Both magnet consumption and wind turbine impact are middle of
IMCOA range
11
12. US DOE
Critical Materials Strategy
Short-Term
Criticality Matrix
DOE assigned a high
supply risk and high
importance for five
rare earths over the
next five years.
12
13. US DOE
Critical Materials Strategy
Medium Term
Criticality Matrix
DOE found that a
high supply risk and
high importance for
these REEs continues
out to 5-15 years.
13
14. Global Supply & Demand
250,000
Global Rare Earths Supply and Demand
(tonnes, REO ±20%)
200,000
150,000
100,000
50,000
0
2005 2006 2007 2008 2009 2010f 2011f 2012f 2013f 2014f 2015f
China Supply Molycorp Supply Other Supply China Demand Adjusted Global Demand
Source: IMCOA
14
15. Chinese Exports
Versus ROW Demand
Metric tons
Additional demand drivers:
Government stockpiling
Further adoption of wind turbine technology
Potential for China to become a net RE importer
Global Surplus Global Deficit
Source: IMCOA
15
16. Observations
On China
1 China continues to warn of declining quotas in the future
2 Closed 280 illegal mines; reducing export licenses; designated
11 mines Jaingxi as “national planning mines”
3
Internal REE demand rising with GDP growth while Chinese
4 production from 2005-2010 relatively stagnant
Strict environmental standards expected to double production
costs (Wang Guozhen, the former VP of China Nonferrous
5 Engineering and Research Institute)
53% of respondents think China will
“become a net importer of
rare earths by 2015”
in a Metal-Pages.com poll.
16
17. Market Dynamics Support
Continued Pricing Gains
Pricing ($/kg) Pricing Drivers
% change
3-Year March
June 20102 Jan. 20113 March 2010 China continues to focus
Average 20101
- Jan. 2011
supply inward, despite
Oxides
growing ROW demand
Lanthanum oxide $6.05 $6.60 $8.12 $60.80 821%
– Dramatic consolidation of
Cerium
Chinese rare earths industry
Oxide (glass
$4.03 $4.09 $6.47 $63.40 1,449%
applications) Existing rare earths
Oxide (water filters) $13.20 - -
production insufficient to meet
XSORBX™ $9.90 - -
expected market demand
Europium oxide $442.07 $473.00 $567.60 $630.00 33%
Metals
National strategic stockpiling
Lanthanum $10.01 $13.20 $13.20 $62.50 373% – China, Japan, and S. Korea
Praseodymium $32.12 $37.99 $42.94 $115.50 204% currently stockpiling
Neodymium $32.41 $37.99 $42.94 $117.50 209% – US and EU looking to
Alloy products stockpile
4
NdFeB alloy $35.20 $42.94 $84.37 140%
4
SmCo alloy $50.60 $54.14 $69.36 37%
Note: NdFeB = Neodymium iron boron; SmCo = Samarium cobalt
1 SRK estimates used for model
2 As of June 15, 2010; Metals-Pages.com
3 As of Jan. 18, 2011; Metals-Pages.com
4 Molycorp estimates
Note: 3-yr average refers to Metals Pages oxide and metal prices averaged from May 2007 – May 2010, FOB China
17
18. World-Class Mining Resource
at Mountain Pass, CA
• 58 years of operating history
• 30-year mine permit and EIR approved
• Mining operations re-started in Dec. 2010
• Construction of new processing facility
underway
• Plan provides for fully installed
infrastructure
– Water
– Electricity
– Natural gas pipeline
– Easy access to Interstates, rail head, and
Reserves & Resources California seaports
Category REO% k tons REO (Mlbs)
• Facility is ISO 9000 and ISO 14000
certified
SEC Guide 7: Proven and Probable 8.24 13,588 2,210
• Estimated 30+ years mine life
NI 43-101: Measured & Indicated 6.68 24,341 3,251
NI 43-101: Inferred 6.32 10,446 1,320 • Ability to double planned production
NI 43-101 Totals 34,787 4,571 under current permitting
• 168 Employees
Source: SRK report dated April 2010
Note: See disclaimer for information on reserves and resources, resources are from the initial SRK report prior to redaction to comply with SEC Industry Guide 7
18
19. Environmental
Technology Breakthroughs
Energy Efficiency Increases Higher RE Recovery and
and GHG Reductions Process Efficiency
With On‐Site Breakthroughs
Natural Gas Allow for Same
Co‐Gen Amount of
Product Using
Large ½ The Ore
Reduction of
Reagent Use
Dramatic
Near‐Zero Reduction in Process
Wastewater Discharge Use of Fresh Water
19
20. Anticipated Cost Advantages
vs. Key Competitors
Average Rare Earth Oxide Production Cost Cost-advantaged processing
(per kg.) drives significant commercial
advantage:
$8.00 High-power quality and efficient
$7.00 onsite natural gas co-generation
$7.00
$6.00 On-site reagent production and
$5.58
acid recycling
$5.00
$4.00
Process technology break-
throughs
$3.00
$2.77 Infrastructure
$2.00
$1.00
$0.00
3
China
1,2
1 IMCOA
2 Wang Guozhen, the former VP of China Nonferrous Engineering and Research Institute, indicated that China’s production costs may double as a result of
ongoing environmental reforms. (Metal-Pages.com, Jan. 7, 2011)
3 Lynas presentation on 12/6/2010
20
21. Trading One Dependence
For Another?
Petroleum Supply Chain
Dependent
Upon
Foreign
Supplies
Hybrid Vehicle Supply Chain
Dependent Upon China
21
22. Our Mine-to-Magnets
Manufacturing Supply Chain
Molycorp’s "Mine-to-Magnets” strategy differentiates us from other early stage concentrate or
oxide-only projects, and provides exposure to the high margin metals, alloys, and magnet markets
Magnet
Molycorp Business Joint Venture2
Rare Earths Rare Earths
Rare Earths Rare Earths Rare Earths
Mining and Material
Metals Alloys Magnets
Milling Processing
Global Supply Chain:
~97% Chinese ~97% Chinese ~100% Chinese 80% Chinese 80% Chinese
Production Production Production
20% Japanese(1) 17% Japanese(1)
3% Europe(1)
Source: REITA report dated January 27, 2010
1 Dependent on Chinese rare earths feedstock
2 “Molycorp and Hitachi Metals, Ltd. have entered into an agreement regarding the planned formation of joint ventures for the production of rare earth alloys and magnets in the U.S.
22
23. Vertical Integration Across the Value
Chain Drives Superior Margins
Nd Oxide to Alloy Value Chain (per kg.)1
Oxide Cost Metal Cost Alloy Cost Margin
$131.41
$35.20 $36.92
$49.68
$6.60 $6.60
$3.85 $4.49 $4.49
Nd Oxide Nd Metal Nd Alloy
Production: 1 kg 0.86 kgs 3.06 kgs
Margin2: $31.35 $70.64
+125%
1 Molycorp cost data based on SRK report dated April 2010
2 Per kilogram of Nd Oxide 23
24. Molycorp Has Secured Non-Binding LOIs
Across the “Mine to Magnets” Value Chain
Denotes Customer Location
Total Number of LOIs Counterparties New Product Introduction
19 Non-binding LOIs Neo Materials XSORBX™ successfully
representing 138% of 2013 introduced into commercial
US chemical and energy
anticipated production volume. wastewater and recreational
companies
water markets.
Contracts signed in 11/10 with Japanese industrial, electronics,
W.R. Grace for 5-year purchase XSORBX™ being readied for
and chemical companies
of La with 3-year option. introduction into intl. drinking
European industrial, electronics, water purification markets.
Neo Materials non-binding LOI and chemical companies
represents another 15-25% of
2013 anticipated production
volume.
24
25. Breakthrough
Technologies
Molycorp Deploys Incredibly Flexible
Technology Focused on:
Water Treatment Industrial Process Waste Streams
• Lack of Clean drinking water is a global problem • XSORBX® ASP, Arsenic Sequestration
Process employs the XSORBX®
• XSORBX® unique chemistry removes:
technology in the mining and smelting
• Pathogens such as Protozoa, Fungi, industry
Bacterial, Viruses
• Volumetric capacity for specific
• Organic toxins such as Pesticides hazardous materials that exceeds any
• Heavy metals such as Arsenic, Selenium, other commercially available product
and Chromium • Studies show stable, concentrated
• We’re developing waste could potentially be classified as
man-portable filters to non hazardous
give our troops the
cleanest drinking
water available
25
26. Commercial Opportunities
In Recycling
1 Recycling will be critical to the rare earth industry, and
Molycorp will be a leader in the recycling industry.
2
Molycorp's new plant was designed with recycling in
mind.
• Lowest-cost operation in the industry.
• Highly flexible circuit design.
• Recycled REE's can be co-processed with primary
production, yielding additional cost savings.
3
Key focus areas:
• RE phosphors from CFLs
• NdFeB alloy recovery in magnet manufacture
26
