Molycorp Ready to Buy Other Rare Earth Miners: CEO
Molycorp is ready to buy other rare earth mining companies should the opportunity arise, said Chief Executive Mark Smith told CNBC Wednesday.
"Molycorp is always interested in opportunities that increase shareholder value or add to our long-term business strategies," he said.
"We are looking at a number of opportunities. I've said before and I’ll say it again, there are more opportunities in the rare earth field today than I’ve seen in the past 25 years."
The Colorado company, with a market cap of $5.8 billion, made two acquisitions in April. It is the largest of the US miner of rare earths, a group of 17 elements that are widely used in consumer electronic items.
The US market as a whole is small at 13 percent, compared with China, which produces 70 percent of rare earth minerals.
"I take a look at the very simple economics of our company and the supply and demand characteristics worldwide for these minerals and I think we’ve got a lot of room to run," Smith said.
Chinese supply "isn’t going to change dramatically," he said. "Internal country demand in China is growing rapidly. They need to keep those minerals in country."
What has changed dramatically is Molycorp's stock price. Smith said he knows hedge funds and others are buying on interest in the sector, running up the stock price.
"A lot of people are taking advantage of that right now and I guess that’s the beauty of the American financial system is they can do that," Smith said.
However, he said, "we would like our stock to move based on our performance as a company and not based on news flow to the extent possible."