ERR News – American mining company Molycorp has bought up a 90.023 percent share in Estonia’s rare earth metals producer AS Silmet, taking control of one of very few sources of the much-sought materials outside China.
The Colorado-based firm paid approximately 62 million euros for its shares, buying 80 percent of the company from former majority holder Silmet Grupp, owned by former prime minister Tiit Vähi, and the remainder of its shares from Austrian firm Treibacher Industrie AG. The deal leaves Silmet Grupp with just under 10 percent ownership, according to a release from Molycorp.
“This acquisition provides Molycorp with a European base of operations as well as a larger global customer base, greater rare earth production capacity, and an expanded product line that extends our interests into other strategic metals and technologies,” Mark Smith, Molycorp CEO, said in the April 4 statement.
In the statement, Molycorp said that it plans to use raw material sourced at its Mountain Pass mine in California to make the Sillamäe facility “the first rare earth oxide and metal producer in Europe that is not dependent on rare earth materials sourced from China.”
Rare earth elements, which are vital in the manufacturing of high-tech goods, have become increasingly in short supply particularly after 2006 when China, the world’s leading supplier, began restricting their production and export.
Molycorp, which signed supply agreements with Japanese firms Sumimoto and Mitsubishi in December, said the Silmet deal would allow it to increase its production capacity from approximately 3,000 tons per year of rare earth oxide equivalent to 6,000 tons.
