UPDATE 3-Miner Molycorp slumps as worries mount over its survival
(Adds details on global rare earths markets, updates stock price)
By Sayantani Ghosh and Shubhankar Chakravorty
March 17 (Reuters) - Molycorp Inc lost about a third of its market value on Tuesday after its auditor raised "substantial doubt" about the rare earths miner's ability to stay in business, putting the United States' only domestic supply of the technology metals at risk.
The Greenwood, Colorado-based company, which posted its twelfth consecutive quarterly loss on Monday, said it might not have enough money to stay afloat if current debt restructuring efforts fail.
"We have incurred, and continue to incur, operating losses," Molycorp said in its annual report. "In addition, we have significant capital requirements, including interest payments to service our debt."
The company is one of the only non-Chinese producers of rare earths, which are used in everything from smartphones to military jet engines to hybrid vehicles. China still controls roughly 90 percent of the world's supply.
Rare earths gained global attention in 2010, when China clamped down on exports, sending prices for the group of 17 metals skyrocketing and leading Japan, Europe and the United States to file a trade complaint.
With the race on to establish a domestic supply, Molycorp that year set to reopening and expanding the historic Mountain Pass rare earth mine in California. But as construction on the project got under way, China loosened its quotas and the rare earths bubble burst. Costs for the mine, meanwhile, continued to climb.
Molycorp has lost nearly all of its value in the last four years, burning through cash in an attempt to ramp up production at Mountain Pass, which is the largest rare earths mine outside China. Continued...