Molycorp acquires rare earth metal and alloy manufacturer Santoku America, Inc.
May 3, 2011
Molycorp Minerals, LLC (Molycorp) has acquired Arizona-based Santoku America, Inc. (SAI), one of the leading producers of high-purity rare earth alloys and metals outside of China, in an all-cash deal for $17.5 million.
The acquisition provides Molycorp with the capability to immediately begin manufacturing and selling rare earth alloys for the production of neodymium iron boron (NdFeB) magnets (used in electric and hybrid cars, advanced wind energy turbines, and many high-tech electronics and applications) and samarium cobalt (SmCo) magnets (used in defense and other applications), as well as a variety of other specialty alloys and products.
SAI will immediately begin sourcing rare earth feed stocks for production of its products from Molycorp’s Mountain Pass, California, rare earth mine and processing facility, making it the first rare earth metal and alloy producer in North America that is not dependent on rare earth materials sourced from China.
Based in Tolleson, Arizona, the facility has been producing specialty alloys, including rare earth alloys, for more than 30 years.
The company will change its name from SAI to Molycorp Metals and Alloys, Inc., to better reflect its new U.S. based ownership and its access to one of the world’s richest rare earth ore deposits at Molycorp’s Mountain Pass rare earth mine and processing facility. Santoku Corporation will provide Molycorp Metals and Alloys, Inc. with technical assistance with respect to the production of rare earth alloys on an ongoing basis and also will act as the exclusive authorised distributor of strip cast NdFeB alloys produced by Molycorp Metals and Alloys, Inc.
“We are very pleased with this acquisition,” said Mark A. Smith, President and Chief Executive Officer of Molycorp, Inc. “It further strengthens and expands the excellent relationship Molycorp and Santoku Corporation have enjoyed for many years. It also accelerates our plans to deploy a fully integrated ‘mine-to-magnets’ manufacturing supply chain in the U.S. In addition to working with Santoku Corporation as our distributor of strip cast NdFeB alloys manufactured at the Arizona plant, we also look forward to continuing our supply relationship in support of Santoku’s ongoing alloy manufacturing operations in Japan.”
“The highly experienced SAI team will be a great addition to our rapidly growing Molycorp family, and I am especially pleased that we will be gaining the talents and experience of SAI President Randall Ice in this acquisition,” added Smith.
“We at Santoku Corporation are pleased that Molycorp has acquired our U.S. based manufacturing operations and that by selling those operations, we have been able to help Molycorp in creating a fully domestic “mine-to-magnets” manufacturing chain in the U.S.,” said Yusuke Inoue, Chairman of Santoku Corporation.
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