metal-powder.net6 MPR January/February 2013

Molycorp begins phase 1 at Mountain Pass facility

Precision Castparts finalises Titanium Metals deal

Molycorp has announced that all key production com-ponents of its new rare earth manufacturing complex in Mountain Pass, California, are operational.

Molycorp has begun ramp-ing up to its Phase 1 run rate of 19,050 metric tons per year (mt/year) of rare earth oxide equivalent (REO) by the middle of 2013.

Molycorp says that with an orderly ramp up of produc-tion it will reach or exceed this rate.

“Mountain Pass is the world’s largest, most technologically advanced, and most environmen-tally responsible rare earth manufacturing complex ever built, and reaching opera-tional status is a historic event,” said Constantine Karayannopoulos, president and CEO of Molycorp. “I am very proud of the work of the entire Molycorp team in achieving this extraordinary milestone.”

The Mountain Pass com-plex is designed to eventu-ally meet a rate of as much as 40,000 mt/year of rare earth oxide equivalent. However, Molycorp says the decision to complete Phase 2 construction and start-up will not be made until mar-ket demand, product pric-ing, capital availability, and

financial returns justify the increase in production.

With the combination of the new Phase 1 ramp-up schedule and current rare earth pricing environment, Molycorp anticipates lower-than-expected revenue and cash flow for 2013, and is evaluating its capital needs for 2013.

Molycorp’s board of directors has also appointed Constantine Karayannopoulos as interim president and CEO.

Karayannopoulos succeeds Mark A.Smith, who has left the company.

Constantine Karayanno-poulos will assume all man-agement responsibilities for Molycorp and its subsidiaries, effective immediately, and will continue to serve as a director and the vice chair-man of Molycorp’s board. A professional engineer, Karayannopoulos previously served as president and CEO of Neo Material Technologies, a position he held from 2005 until this year. At Neo Materials Technologies, Karayannopoulos also served as executive vice president and chief operating officer, as well as vice president and general manager of the company’s rare earths busi-ness unit and vice-president of sales.

Precision Castparts Corp has completed its acquisition of Titanium Metals Corp (Timet) following an agreement to purchase Timet for around US$2.9 billion.

Timet was a subsidiary of ELIT Acquisition Sub Corp, a wholly owned subsidiary of Precision Castparts, since December 21, 2012.

Acquisition Sub, as the owner of more than 90% of the outstanding shares of Timet common stock, completed a short form merger with Timet on 7 January, 2013, as a result of which Timet became a wholly owned subsidiary of Precision Castparts.

“Timet will provide us with the titanium capability that has always been a key missing piece of our overall product portfolio,” said Mark Donegan, chairman and CEO of Precision Castparts Corp (PCC), a global manufacturer of complex metal compo-nents. “As our 2006 acquisi-tion of Special Metals did for us with nickel alloys, acquir-ing Timet will enable us to streamline our supply chain and better manage our input costs in our core operations. As we continue to grow in the

aerostructure market, this supply linkage will present even more of an opportunity. [...] We expect to generate significant synergies by putting our two companies together and leveraging our respective strengths.”

Donegan said that Timet’s melting expertise and PCC’s forging and conversion assets are a complementary strategic fit. He plans to look at the two companies’ col-lective cost structure and leverage the combined con-version assets to improve their customer presence and penetrate new markets.

“This transaction is truly a needle mover, a deal that offers PCC and our custom-ers a wide range of oppor-tunities going forward,” Donegan explained. “We’ve worked with Timet for many years and are quite familiar with their operations, so we expect integration to move ahead quickly once the merg-er is completed.”

The transaction has been approved by the Board of Directors of Timet (following the recommendation of a special committee of inde-pendent directors) and the board of directors of PCC.The Mountain Pass complex will produce molybdenum from ore.

Precision Castparts intends to use the acquisition

to develop its aerospace business.

MPR0113_News 6 29-01-13 16:46:34