Molycorp Inc. won court approval to exit chapter 11 protection yesterday under a plan that leaves the fate of the sole U.S. source of rare earths uncertain, the Wall Street Journal reported today. Bankruptcy Judge Christopher Sontchi confirmed a plan that puts a trimmed-down Molycorp largely in the hands of senior lender Oaktree Capital Management. Unsecured creditors will share a minority stake in the company, which is being rebuilt around the Neo line of businesses that process rare earths. As for the Mountain Pass mine in California, which is the only U.S. mine producing elements essential to electronics including cellphones and defense systems, it could be facing liquidation, or it could be targeted for a deal involving an unnamed foreign entity. The situation is “fluid,” Judge Sontchi commented during hearings in the U.S. Bankruptcy Court in Wilmington, Del. Molycorp bondholders yesterday won court approval to buy mineral rights and intellectual property associated with the facility, but are leaving the mine itself behind. To counter protests from regulators concerned Molycorp was walking away from environmental risks, the company pointed to surety bonds and the scrap value of the plant, which will help fund a cleanup.
