Molycorp shares plunge 25 pct on weak outlook
Molycorp says 2013 revenue to be lower than expected, the miner's shares plunge 25 pct
GREENWOOD VILLAGE, Colo. (AP) -- Shares of Molycorp Inc. lost a quarter of their value Thursday after the miner said its 2013 revenue would be lower than expected, citing production delays and weak prices.
The company, which is based in Greenwood Village, Colo., produces rare earth minerals that are used in a wide variety of applications, including consumer electronics and hybrid and electric vehicles.
Molycorp said that operations at its Mountain Pass, Calif., facility have begun, and the mine is expected to be able to produce 19,050 metric tons annually by the end of June. The company originally expected to hit that production rate by the end of 2012.
But based on that revised schedule and drops in prices of rare earth materials, Molycorp said it expects its revenue and cash flow for 2013 to be lower than expected. The company said it's also evaluating its capital needs for 2013.
In addition, Molycorp said that it won't go forward with phase two of the project, which would double its production capacity, until market demand, prices, capital availability and financial returns justify higher production.
Molycorp shares tumbled $2.66, or 25 percent, to $8.13 in morning trading. The shares tumbled in 2012, losing about 61 percent of their value.
