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Molycorp's third-quarter profit and sales under estimates because of the diversion of some output to Estonia

Juhan Tere, BC, Tallinn, 14.11.2011.Print version
U.S. rare earths producer Molycorp posted third-quarter profit and revenue that missed analysts' estimates after sales volumes were less than it had forecast, Bloomberg/LETA reports.

Molycorp's Mountain Pass unit produced 739 metric tons of rare-earth oxide equivalent, the Greenwood Village, Colorado- based company said on November 10 in a statement. In August, it forecast sales of 917 to 1,321 tons.


Chief Executive Officer Mark Smith said the volumes were lower than expected because of equipment outages related to the acceleration of work at the Mountain Pass mine in California and the diversion of some output to Estonia, where Molycorp has a factory. The company in October resumed mining at Mountain Pass, which had been shut since 2002.


"We'll have to take a few additional shutdowns," Smith said in a telephone interview. "It will not affect our sales because we have material in inventory."


Third-quarter net income was 43.7 million US dollars, or 52 cents a share, compared with a loss of 10.1 million dollars, or 15 cents, a year earlier.


Profit excluding inventory and consulting costs was 67 cents share.


Sales climbed 16-fold to 138 million dollars from 8.5 million dollars, missing the 161 million dollars average of analysts estimates.


As reported, Molycorp became the sole owner of Tiit Vähi’s company Silmet Grupp last month.


Molycorp announced that Silmet’s council chairman Tiit Vähi and his son-in-law Lauri Karp, who were involved in managing the company, will continue in the company's council.


Molycorp bought 90.023% of Silmet on April 1 this year for 89 million USD. The value of the remaining shares was proportional to the first transaction sum, the company said.

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