Molycorp Inc., a US miner and processor of rare-earths elements, is expected to announce that it will skip a US$32.5 million loan payment, leading to a potential bankruptcy filing before the end of June, the Wall Street Journal reported.
Following a steep slide in rare-earths prices, Molycorp has suffered three straight years of quarterly losses and is now saddled with US$1.7 billion in debt.
The company had aimed to produce 20,000 metric tons a year at its Mountain Pass, California, facility, but actual output has been only slightly more than half that amount.
The stock price has fallen to under a dollar per share and the company warned investors in April that if prices and profits don’t improve, it will have to “cease operations as a going concern”.
Molycorp, a former unit of Chevron Corp., is in restructuring talks with firms representing its creditors amid its financial woes.
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