Molycorp to Acquire Top Bond Magnet Powder Maker

U.S. major rare earth producer, Molycorp and Neo Material Technologies, the world largest supplier of bond magnetic powder headed in Canada, co-announced on March 8 they agreed in Molycorp’s acquisition for Neo Material Technologies at C$ 1.3 billion. Molycorp will be able to establish integrated production from a rare earth mine to rare earth magnets while to enter China market which accounts for 70% in the world rare earth demand through this acquisition. Molycorp will also gain production technologies for rare metals such as gallium and indium.

Neo Material Technologies’ group company, Magnequench is the world largest maker of patented neodymium-iron-boron magnetic powder. Molycorp has Mountain Pass rare earth mine in California, the U.S.A. Molycorp’s chief executive officer Mark A. Smith said the company can approach its target to establish integrated production from rare earth mine to magnet by this acquisition.

Molycorp can also widen its business areas into rare metal fields though the company’s subsidiary in Estonia has already produced niobium and tantalum. Molycorp will acquire additional production technologies for gallium, indium, rhenium and zirconium. The company will become a comprehensive rare metal supplier.

Shareholders of Neo Material Technologies will actually gain C$ 11.30 per share, C$ 8.05 in cash with Molycorp’s 0.122 shares. This corresponds to 42% premium against the closing price of Neo Material Technologies’ share on March 8. The acquisition procedure is expected to close in 2Q-3Q 2012.