10-Q

Use these links to rapidly review the document
TABLE OF CONTENTS

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)
ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2012
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                        to

Commission File Number 001-34827

Molycorp, Inc.
(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	27-2301797 (I.R.S. Employer Identification No.)
5619 Denver Tech Center Parkway, Suite 1000 Greenwood Village, Colorado (Address of principal executive offices)	80111 (Zip Code)

(303) 843-8040
(Registrant's telephone number, including area code)

        Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

        Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý    No o

        Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ý Accelerated filer o Non-accelerated filer o
(Do not check if a
smaller reporting company) Smaller reporting company o

        Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o    No ý

        As of May 9, 2012, the registrant had 96,395,822 shares of common stock, par value $0.001 per share, outstanding.

MOLYCORP, INC.

INDEX

	PAGE
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets (Unaudited)	3
Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited)	4
Condensed Consolidated Statement of Stockholders' Equity (Unaudited)	5
Condensed Consolidated Statements of Cash Flows (Unaudited)	7
Notes to Condensed Consolidated Financial Statements(Unaudited)	8
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3. Quantitative and Qualitative Disclosures About Market Risk	53
Item 4. Controls and Procedures	54
Part II. OTHER INFORMATION
Item 1. Legal Proceedings	54
Item 1A. Risk Factors	55
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	55
Item 3. Defaults Upon Senior Securities	55
Item 4. Mine Safety Disclosures	55
Item 5. Other Information	55
Item 6. Exhibits	56

2

MOLYCORP, INC.
(A Company in the Development Stage)

Condensed Consolidated Balance Sheets (Unaudited)

(In thousands, except share and per share amounts)

	March 31, 2012			December 31, 2011
ASSETS
Current assets:
Cash and cash equivalents	$	609,794		$	418,855
Trade accounts receivable, net (Note 3)		50,715			70,679
Inventory (Note 4)		110,487			111,943
Deferred charges (Note 14)		6,862			7,318
Deferred tax assets (Note 14)		2,049			—
Prepaid income taxes		9,467			10,514
Prepaid expenses and other assets		7,302			19,735
Total current assets		796,676			639,044
Non-current assets:
Deposits (Note 5)		23,277			23,286
Property, plant and equipment, net (Note 6)		827,716			561,628
Inventory (Note 4)		10,200			4,362
Intangible assets, net (Note 8)		3,084			3,072
Investments (Note 9)		23,608			20,000
Goodwill (Note 10)		3,432			3,432
Other assets		760			301
Total non-current assets		892,077			616,081
Total assets	$	1,688,753		$	1,255,125
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable	$	203,986		$	161,587
Accrued expenses (Note 11)		15,502			12,898
Deferred tax liabilities (Note 14)		—			1,356
Debt (Note 13)		1,383			1,516
Short-term borrowing—related party (Note 20)		—			870
Current portion of asset retirement obligation (Note 12)		1,552			396
Total current liabilities		222,423			178,623
Non-current liabilities:
Asset retirement obligation (Note 12)		16,035			15,145
Deferred tax liabilities (Note 14)		18,580			18,899
Debt (Note 13)		197,917			196,545
Other non-current liabilities		861			683
Total non-current liabilities		233,393			231,272
Total liabilities		455,816			409,895
Commitments and contingencies (Note 18)
Stockholders' equity:
Common stock, $0.001 par value; 350,000,000 shares authorized at March 31, 2012 (Note 15)		96			84
Preferred stock, $0.001 par value; 5,000,000 shares authorized at March 31, 2012 (Note 15)		2			2
Additional paid-in capital		1,230,036			838,547
Accumulated other comprehensive loss		(5,951	)		(8,481	)
Surplus accumulated during the development stage		8,754			15,078
Total stockholders' equity		1,232,937			845,230
Total liabilities and stockholders' equity	$	1,688,753		$	1,255,125

See accompanying notes to the condensed consolidated financial statements.

3

MOLYCORP, INC.
(A Company in the Development Stage)

Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited)

(In thousands, except share and per share amounts)

	Three Months Ended March 31,						Total from June 12, 2008 (Inception) Through March 31, 2012
	2012			2011
Sales	$	84,470		$	26,261		$	525,688
Operating costs and expenses:
Cost of goods sold		(53,443	)		(16,677	)		(303,736	)
Selling, general and administrative		(31,214	)		(11,238	)		(158,778	)
Depreciation and amortization		(107	)		(83	)		(1,369	)
Accretion expense		(251	)		(234	)		(3,374	)
Operating (loss) income		(545	)		(1,971	)		58,431
Other income (expense):
Other expense		(6,578	)		(168	)		(6,341	)
Foreign currency transaction gains (losses), net		1,604			—			(3,811	)
Interest income (expense), net		85			140			(238	)
		(4,889	)		(28	)		(10,390	)
(Loss) income before income taxes and equity earnings		(5,434	)		(1,999	)		48,041
Income tax benefit (expense)		2,183			(199	)		(26,393	)
Equity in results of affiliates		(227	)		—			(227	)
Net (loss) income	$	(3,478	)	$	(2,198	)	$	21,421
Net (loss) income	$	(3,478	)	$	(2,198	)	$	21,421
Other comprehensive income:
Foreign currency translation adjustments		2,530			—			(5,951	)
Comprehensive (loss) income	$	(948	)	$	(2,198	)	$	15,470
Weighted average shares outstanding (Common shares)(1)
Basic		87,006,460			82,253,700			60,086,657
Diluted		87,006,460			82,253,700			60,087,803
(Loss) income per share of common stock (Note 16):
Basic	$	(0.07	)	$	(0.04	)	$	0.14
Diluted	$	(0.07	)	$	(0.04	)	$	0.14

(1)

Weighted average shares outstanding include the retroactive treatment of exchange ratios for conversion of Class A common stock and Class B common stock to common stock in conjunction with the initial public offering.

See accompanying notes to the condensed consolidated financial statements.

4

MOLYCORP, INC.
(A Company in the Development Stage)

Condensed Consolidated Statement of Stockholders' Equity (Unaudited)

(In thousands, except share and per share amounts)

											Series A Mandatory Convertible Preferred Stock
																			Surplus (Deficit) Accumulated During the Development Stage
	Class A Common Stock						Common Stock
																	Accumulated Other Comprehensive Income
															Additional Paid-In Capital							Total Molycorp Stockholders			Non controlling interest		Total Equity
	Shares			$			Shares		$		Shares		$
Balance at June 12, 2008 (Inception)		—		$	—			—	$	—		—	$	—	$	—	$	—	$	—		$	—		$	—	$	—
Issuance of shares for cash on various dates at $2.37 per share		38,762,268			39			—		—		—		—		91,961		—		—			92,000			—		92,000
Share-based compensation issued on November 6, 2008 at $2.24 per share based on a set dollar amount		66,957			—			—		—		—		—		150		—		—			150			—		150
Net loss		—			—			—		—		—		—		—		—		(14,074	)		(14,074	)		—		(14,074	)
Balance at December 31, 2008		38,829,225		$	39			—	$	—		—	$	—	$	92,111	$	—	$	(14,074	)	$	78,076		$	—	$	78,076
Issuance of shares for cash on various dates at $4.68 per share		3,844,858			4			—		—		—		—		18,000		—		—			18,004			—		18,004
Conversion of short term borrowings from member and related accrued interest in common shares on November 15, 2009 at $2.96 per share based on a contractual price		2,303,033			2			—		—		—		—		6,829		—		—			6,831			—		6,831
Exercise of employee options on September 4, 2009 at $2.37 per share		21,069			—			—		—		—		—		50		—		—			50			—		50
Share-based compensation		—			—			—		—		—		—		241		—		—			241			—		241
Net loss		—			—			—		—		—		—		—		—		(28,587	)		(28,587	)		—		(28,587	)
Balance at December 31, 2009		44,998,185		$	45			—	$	—		—	$	—	$	117,231	$	—	$	(42,661	)	$	74,615		$	—	$	74,615
Issuance of shares for cash on various dates at $2.60 per share		5,767,670			6			—		—		—		—		14,994		—		—			15,000			—		15,000
Exercise of employee options on February 1, 2010 at $2.37 per share		126,405			—			—		—		—		—		300		—		—			300			—		300
Conversion of Class A stock to common stock in conjunction with the IPO on August 3, 2010		(50,892,260	)		(51	)		50,892,260		51		—		—		—		—		—			—			—		—
Sale of shares of common stock at $14.00 per share in IPO 2010, net of offering costs of $29.2 million		—			—			29,128,700		29		—		—		378,604		—		—			378,633			—		378,633
Conversion of Class B stock to common stock in conjunction with the IPO on August 3, 2010		—			—			2,232,740		2		—		—		28,661		—		—			28,663			—		28,663
Stock-based compensation		—			—			37,500		—		—		—		76		—		—			76			—		76
Net loss		—			—			—		—		—		—		—		—		(50,774	)		(50,774	)		—		(50,774	)
Balance at December 31, 2010		—		$	—			82,291,200	$	82		—	$	—	$	539,866	$	—	$	(93,435	)	$	446,513		$	—	$	446,513

See accompanying notes to the condensed consolidated financial statements.

5

MOLYCORP, INC.
(A Company in the Development Stage)

Condensed Consolidated Statement of Stockholders' Equity (Unaudited) (Continued)

(In thousands, except share and per share amounts)

									Series A Mandatory Convertible Preferred Stock
																			Surplus (Deficit) Accumulated During the Development Stage
	Class A Common Stock
					Common Stock											Accumulated Other Comprehensive Income
													Additional Paid-In Capital									Total Molycorp Stockholders			Non controlling interest			Total Equity
	Shares		$		Shares		$		Shares		$
Balance at December 31, 2010		—	$	—		82,291,200	$	82		—	$	—	$	539,866		$	—		$	(93,435	)	$	446,513		$	—		$	446,513
Sale of Series A mandatory convertible preferred stock on February 16, 2011 at $100.00 per share, net of underwriting		—		—		—		—		2,070,000	$	2		199,640			—			—			199,642			—			199,642
Stock-based compensation		—		—		11,424		—		—		—		4,671			—			—			4,671			—			4,671
Issuance of shares for interest in Molycorp Silmet on April 1, 2011 at $45.60 per share		—		—		1,593,419		2		—		—		72,653			—			—			72,655			8,820			81,475
Component of convertible debt		—		—		—		—		—		—		36,227			—			—			36,227			—			36,227
Deferred taxes on component of convertible debt		—		—		—		—		—		—		(14,138	)		—			—			(14,138	)		—			(14,138	)
Net income		—		—		—		—		—		—		—			—			117,526			117,526			808			118,334
Preferred dividends		—		—		—		—		—		—		—			—			(9,013	)		(9,013	)		—			(9,013	)
Other comprehensive income		—		—		—		—		—		—		—			(8,058	)		—			(8,058	)		(423	)		(8,481	)
Acquisition of noncontrolling interest		—		—		—		—		—		—		(372	)		(423	)		—			(795	)		(9,205	)		(10,000	)
Balance at December 31, 2011		—	$	—		83,896,043	$	84		2,070,000	$	2	$	838,547		$	(8,481	)	$	15,078		$	845,230		$	—		$	845,230
Stock-based compensation (Note 17)		—		—		—		—		—		—		1,408			—			—			1,408			—			1,408
Issuance of shares for investment from Molymet on March 8, 2012 at $31.218 per share, net of stock issuance costs (Note 15)		—		—		12,500,000		12		—		—		390,081			—			—			390,093			—			390,093
Net loss		—		—		—		—		—		—		—			—			(3,478	)		(3,478	)		—			(3,478	)
Preferred dividends		—		—		—		—		—		—		—			—			(2,846	)		(2,846	)		—			(2,846	)
Other comprehensive income		—		—		—		—		—		—		—			2,530			—			2,530			—			2,530
Balance at March 31, 2012		—	$	—		96,396,043	$	96		2,070,000	$	2	$	1,230,036		$	(5,951	)	$	8,754		$	1,232,937		$	—		$	1,232,937

See accompanying notes to the condensed consolidated financial statements.

6

MOLYCORP, INC.
(A Company in the Development Stage)

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

	March 31, 2012			March 31, 2011			Total from June 12, 2008 (Inception) through March 31, 2012
Cash flows from operating activities:
Net (loss) income	$	(3,478	)	$	(2,198	)	$	21,421
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation, amortization and accretion		3,836			2,334			32,751
Deferred income tax benefit		(3,725	)		—			(801	)
Inventory write-downs		6,563			630			32,356
Stock-based compensation expense		825			2,934			34,626
Foreign currency transaction losses, net		(1,668	)		—			3,747
Unrealized loss on derivatives		6,641			—			6,643
Allowance for doubtful accounts		2,500			—			2,500
Other operating adjustments and write-downs		154			—			5,141
Net change in operating assets and liabilities (Note 21)		4,379			1,503			(137,821	)
Net cash provided by operating activities		16,027			5,203			563
Cash flows from investing activities:
Acquisition of the Molycorp Mountain Pass facility		—			—			(82,150	)
Cash paid in connection with acquisitions, net of cash acquired		—			—			(30,023	)
Investment in joint venture		(3,836	)		—			(3,836	)
Cash paid to acquire non-marketable securities		—			—			(20,000	)
Deposits		(459	)		(1,500	)		(23,762	)
Capital expenditures		(206,463	)		(26,345	)		(549,378	)
Other investing activities		2			—			9,521
Net cash used in investing activities		(210,756	)		(27,845	)		(699,628	)
Cash flows provided by financing activities:
Capital contributions		390,225			—			515,229
Repayments of short-term borrowings—related party		(870	)		(935	)		(5,127	)
Repayments of debt		(777	)		—			(5,205	)
Net proceeds from sale of common stock in conjunction with the initial public offering		—			—			378,633
Net proceeds from sale of preferred stock		—			199,642			199,642
Net proceeds from sale of convertible notes		—			—			223,100
Payments of preferred dividends		(2,846	)		—			(11,861	)
Proceeds from short-term borrowings—related party		—			—			11,645
Proceeds from debt		—			—			5,131
Other financing activities		(132	)		—			34
Net cash provided by financing activities		385,600			198,707			1,311,221
Effect of exchange rate changes on cash		68			—			(2,362	)
Net change in cash and cash equivalents		190,939			176,065			609,794
Cash and cash equivalents at beginning of the period		418,855			316,430			—
Cash and cash equivalents at end of period	$	609,794		$	492,495		$	609,794

See accompanying notes to the condensed consolidated financial statements.

7

MOLYCORP, INC.
(A Company in the Development Stage)

Notes to Condensed Consolidated Financial Statements

March 31, 2012

(Unaudited)

(1) Basis of Presentation

        Molycorp, Inc. ("Molycorp" or the "Company") is the largest rare earth oxides ("REOs") producer in the Western hemisphere and owns one of the world's largest rare earth projects outside of China. Molycorp also owns one of the largest REOs and rare metal producers in Europe, and the only producer of rare earth alloys in the United States. Molycorp, Inc. was formed on March 4, 2010 for the purpose of continuing the business of Molycorp, LLC in corporate form. On April 15, 2010, the members of Molycorp, LLC contributed either (a) all of their member interests in Molycorp, LLC or (b) all of their equity interest in entities that held member interests in Molycorp, LLC (and no other assets or liabilities) to Molycorp, Inc. in exchange for Molycorp, Inc. Class A common stock. Accordingly, Molycorp, LLC and its wholly owned subsidiary, Molycorp Minerals, LLC ("Molycorp Minerals"), became subsidiaries of Molycorp, Inc., which we refer to as the Corporate Reorganization. On June 15, 2010, Molycorp LLC was merged with and into Molycorp Minerals.

        The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and Regulation S-X promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"). While the December 31, 2011 balance sheet information was derived from the Company's audited financial statements, for interim periods, GAAP and Regulation S-X do not require all information and related disclosures that are required in the annual financial statements, and all disclosures required by GAAP for annual financial statements have not been included. Therefore, the accompanying unaudited condensed consolidated financial statements should be read in conjunction with Molycorp's consolidated financial statements and related notes for the year ended December 31, 2011, and the period from June 12, 2008 (Inception) through December 31, 2011, included in Molycorp's Form 10-K for the fiscal year ended December 31, 2011.

        The accompanying unaudited condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, and which, in the opinion of management, are necessary for the fair presentation of Molycorp's financial position, results of operations and cash flows at March 31, 2012, and for all periods presented. The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its consolidated subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

        The preparation of the financial statements, in accordance with GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates on the Company's historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ significantly from these estimates under different assumptions and conditions. Significant estimates made by management in the accompanying financial statements include the collectability of accounts receivable, the recoverability of inventory, the useful lives and recoverability of long-lived assets such as property, plant and equipment, intangible assets and investments, the fair values of assets acquired and liabilities assumed, including business combinations, and the adequacy of the Company's asset retirement obligations.

8

MOLYCORP, INC.
(A Company in the Development Stage)

Notes to Condensed Consolidated Financial Statements (Continued)

March 31, 2012

(Unaudited)

(2) Segment Information

        The Company is currently organized into three primary divisions or operating segments: Molycorp Mountain Pass, Molycorp Silmet and Molycorp Metals and Alloys ("MMA"). Molycorp Mountain Pass owns and operates the Company's rare earth mine and processing facilities in Mountain Pass, California (the "Molycorp Mountain Pass facility"). Molycorp Silmet, which was acquired on April 1, 2011, produces REOs and rare metals at the Company's manufacturing facility located in Sillamäe, Estonia. MMA, which was acquired on April 15, 2011, manufactures neodymium and samarium magnet alloy and other specialty alloy products at the Company's facility in Tolleson, Arizona. Each of the segments has only one production and shipping location. Sales to external customers by geographic area are based on the location in which the sale originated.

        The following table provides operating and financial information of the three segments as of and for the three months ended March 31, 2012:

Three Months Ended March 31, 2012 (In thousands)	Molycorp Mountain Pass			Molycorp Silmet			MMA			Other(a)			Eliminations(b)			Total Molycorp, Inc.
Sales:
External	$	44,478		$	21,036		$	18,956		$	—		$	—		$	84,470
Intersegment		1,832			3,210			—						(5,042	)		—
Total sales		46,310			24,246			18,956
Cost of goods sold		(18,846	)		(34,774	)		(18,632	)		—			18,809			(53,443	)
Selling, general and administrative expenses		(29,079	)		(1,714	)		(457	)		(273	)		309			(31,214	)
Depreciation, amortization and accretion expense		(334	)		—			—			(24	)		—			(358	)
Operating (loss) income		(1,949	)		(12,242	)		(133	)		(297	)		14,076			(545	)
Other (expense) income		(6,444	)		1,579			(4	)		(20	)		—			(4,889	)
Loss before income taxes and equity earnings	$	(8,393	)	$	(10,663	)	$	(137	)	$	(317	)	$	14,076		$	(5,434	)
Total assets at March 31, 2012	$	1,675,653		$	100,499		$	24,313		$	630		$	(112,342	)	$	1,688,753
Capital expenditures (accrual basis excluding capitalized interest)	$	259,438		$	2,501		$	100		$	—		$	—		$	262,039

(a)

Includes expenses incurred by and capital invested in the sales office in Tokyo, Japan.

(b)

The $112,342 of total assets eliminations is comprised of $98,883 of intercompany investments and $13,459 of intercompany accounts receivable and profits in inventory. The $18,809 cost of goods sold elimination amount includes elimination of the intercompany gross profits as well as elimination of lower of cost or market adjustments related to the intercompany inventory.

9

MOLYCORP, INC.
(A Company in the Development Stage)

Notes to Condensed Consolidated Financial Statements (Continued)

March 31, 2012

(Unaudited)

(3) Trade Accounts Receivable

        Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company reviews the need for an allowance for doubtful accounts on a quarterly basis. At March 31, 2012 and December 31, 2011, the allowance for doubtful accounts was $2.5 million and zero, respectively.

(4) Inventory

        At March 31, 2012 and December 31, 2011, inventory consisted of the following (in thousands):

	March 31, 2012		December 31, 2011
Current:
Concentrate stockpiles	$	1,832	$	3,704
Raw materials		33,540		44,770
Work in process		14,099		16,602
Finished goods		58,991		45,045
Materials and supplies		2,025		1,822
Total current	$	110,487	$	111,943
Long-term:
Concentrate stockpiles	$	1,867	$	1,144
Raw materials		8,328		3,186
Finished goods		5		32
Total long-term	$	10,200	$	4,362

Assessment of normal production levels

        For the three months ended March 31, 2012 and 2011, and cumulatively for the period from June 12, 2008 (Inception) through March 31, 2012, Molycorp determined that $3.0 million, $2.6 million and $20.8 million, respectively, of production costs would have been allocated to additional production, assuming Molycorp had been operating at normal production ranges. As a result, these costs were excluded from inventory and instead expensed during the applicable periods. The assessment of normal production levels is judgmental and is unique to each quarter.

Write-downs of inventory

        For the three months ended March 31, 2012 and 2011, and cumulatively for the period from June 12, 2008 (Inception) through March 31, 2012, the Company recognized write-downs of $6.6 million, $0.6 million and $30.4 million, respectively, as a result of production or purchase costs in excess of net realizable value. In addition, the Company recognized write-downs of work-in-process and stockpile inventory totaling zero, $1.3 million and $5.0 million for the three months ended March 31, 2012 and 2011, and cumulatively for the period from June 12, 2008 (Inception) through March 31, 2012, respectively, based on adjustments to estimated REOs quantities.

10

MOLYCORP, INC.
(A Company in the Development Stage)

Notes to Condensed Consolidated Financial Statements (Continued)

March 31, 2012

(Unaudited)

(5) Deposits

        The Company had $23.3 million in deposits reported as non-current assets at March 31, 2012 and December 31, 2011. The deposits consist of $20.6 million under an escrow arrangement for the Company's facilities agreement with Kern River Gas Transmission Company, $1.5 million related to the Company's construction insurance program and $1.2 million related primarily to other restricted cash requirements.

(6) Property, Plant and Equipment, net

        The Company capitalized $265.8 million and $416.8 million in plant modernization and other capital costs for the three months ended March 31, 2012 and the year ended December 31, 2011, respectively. These amounts include capitalized interest of $3.8 million and $7.5 million, respectively.

        Capital expenditures under the Company's initial modernization and expansion efforts, including the accelerated start-up of the Molycorp Mountain Pass facility ("Project Phoenix Phase 1"), and the Company's second phase capacity expansion plan ("Project Phoenix Phase 2"), and other capital projects related to operations at Molycorp Mountain Pass totaled $253.6 million and $388.5 million for the three months ended March 31, 2012 and the year ended December 31, 2011, respectively, on an accrual basis and excluding capitalized interest.

        At March 31, 2012 and December 31, 2011, property, plant and equipment consisted of the following (in thousands):

	March 31, 2012			December 31, 2011
Land	$	11,350		$	11,059
Land improvements		15,912			15,748
Buildings and improvements		26,376			23,677
Plant and equipment		85,752			68,441
Vehicles		1,548			1,235
Computer software		4,425			3,002
Furniture and fixtures		635			464
Construction in progress		683,860			436,547
Mineral properties		24,790			24,692
Property, plant and equipment at cost		854,648			584,865
Less accumulated depreciation		(26,932	)		(23,237	)
Property, plant and equipment, net	$	827,716		$	561,628

11

MOLYCORP, INC.
(A Company in the Development Stage)

Notes to Condensed Consolidated Financial Statements (Continued)

March 31, 2012

(Unaudited)

(7) Mineral Properties and Development Costs

        Mineral properties and development costs, which are referred to collectively as mineral properties, include acquisition costs, drilling costs, and the cost of other development work, all of which are capitalized. The Company depletes mineral properties using the units of production method over estimated proven and probable reserves. For the three months ended March 31, 2012, the Company capitalized $21,000 of depletion costs in work-in-process inventory related to the reserves that were mined and crushed during this period.

(8) Intangible Assets

        At March 31, 2012 and December 31, 2011, amortizable intangible assets consisted of the following (in thousands):

	March 31, 2012			December 31, 2011
Trade name	$	786		$	786
Customer relationships		2,221			2,153
Other		533			516
Gross carrying amount		3,540			3,455
Less accumulated amortization		(456	)		(383	)
Net carrying amount	$	3,084		$	3,072

        The change in the gross carrying amount of customer relationships and other intangible assets is attributable to the fluctuation in the period of the U.S. dollar against the Euro, which is the functional currency of Molycorp Silmet.

(9) Investments

Boulder Wind Power, Inc.

        On September 13, 2011, the Company invested $20.0 million into Boulder Wind Power, Inc. Series B convertible preferred stock, which is accounted for at cost. At March 31, 2012, the fair value of this investment was not estimated as there were no identified events or changes in circumstances that may have had a significant adverse effect on the fair value of the investment.

Intermetallics Japan Joint Venture

        On November 28, 2011, Molycorp, Daido Steel Co., Ltd. ("Daido") and Mitsubishi Corporation ("Mitsubishi") entered into a preliminary shareholders agreement for the purpose of establishing a new private company, Intermetallics Japan ("IMJ"), to manufacture sintered neodymium-iron-boron ("NdFeB") permanent rare earth magnets. The capital contribution ratio of the newly formed company is 30.0% by Molycorp, 35.5% by Daido and 34.5% by Mitsubishi. According to the definitive shareholders agreement, which was signed in January 2012, Molycorp will contribute, upon achievement of certain milestones and subject to the approval of Molycorp's Board of Directors, Japanese Yen

12

MOLYCORP, INC.
(A Company in the Development Stage)

Notes to Condensed Consolidated Financial Statements (Continued)

March 31, 2012

(Unaudited)

(9) Investments (Continued)

(JPY) 2.5 billion in cash (or approximately $30.4 million based on the JPY/ U.S. dollar exchange rate at March 31, 2012), in exchange for ordinary shares of IMJ over a period of twelve months. The actual remittance amounts will vary depending on the future exchange rate between the U.S. dollar and the Japanese Yen, and the achievement of certain milestones by the joint venture.

        On January 11, 2012, the Company made its first contribution of $3.8 million to IMJ. The Company accounts for this investment under the equity method because it has the ability to exercise significant influence over the operating and financial policies of IMJ, as evidenced by Molycorp's ownership share and its proportional voting rights and representation in the Board of Directors of IMJ. The condensed consolidated statement of operations and comprehensive income for the three months ended March 31, 2012 includes a loss of $0.2 million from the Company's proportional ownership in IMJ.

(10) Acquisitions

        The following table summarizes the purchase prices and opening balance sheets for the acquisition of 90.023% controlling interest in Molycorp Silmet on April 1, 2011 and of MMA on April 15, 2011 (in thousands):

Effective acquisition date for financial reporting purposes:	Molycorp Silmet April 1, 2011			MMA April 15, 2011
Purchase consideration:
Cash consideration	$	9,021		$	17,500
Fair value of common stock		72,653			—
Total purchase consideration	$	81,674		$	17,500
The fair values of the assets and liabilities acquired:
Cash	$	105		$	6,395
Accounts receivable and other current assets		8,626			5,474
Inventory		37,404			11,327
Property and equipment, net		63,393			4,512
Intangible assets subject to amortization		2,669			—
Goodwill		1,455			1,977
Liabilities		(19,974	)		(8,989	)
Deferred tax liabilities		—			(3,196	)
Long-term debt		(3,184	)		—
Noncontrolling interest		(8,820	)		—
Total purchase consideration	$	81,674		$	17,500

13

MOLYCORP, INC.
(A Company in the Development Stage)

Notes to Condensed Consolidated Financial Statements (Continued)

March 31, 2012

(Unaudited)

(10) Acquisitions (Continued)

        The fair value of the accounts receivable acquired includes trade receivables of $5.0 million for Molycorp Silmet and $4.9 million for MMA. These trade receivables were collected by December 31, 2011. Molycorp Silmet's intangible assets subject to amortization relate primarily to customer relationships with a weighted average useful life of 15 years. Goodwill associated with the Molycorp Silmet acquisition arose primarily because of the acquired workforce. Goodwill associated with the MMA acquisition arose primarily because of the requirement to record a deferred tax liability for the difference between the assigned values and the tax basis of assets acquired and liabilities assumed at amounts that do not reflect fair value. The goodwill is not amortized and is not deductible for tax purposes. The fair value of the noncontrolling interest in Molycorp Silmet as of April 1, 2011 was valued using a combination of the market approach and income approach.

        The pro forma revenues, earnings and earnings per share of the Company for the first quarter of 2011 assuming the acquisition of Molycorp Silmet and MMA occurred on January 1, 2011, are as follows:

(In thousands, except per share amounts)	Revenue		Net Income (loss)		Net Income (loss) Attributable To Molycorp		EPS Basic
Unaudited pro forma January 1, 2011 to March 31, 2011 (combined entity)	$	59,734	$	4,916	$	4,623	$	0.04

        The supplemental pro forma amounts are not necessarily indicative of the operating results that would have occurred if these acquisitions had taken place on January 1, 2011.

        The unaudited pro forma earnings of the combined entity were adjusted to exclude $1.1 million of purchase price variance MMA capitalized during the first quarter of 2011. This pro forma adjustment is based on currently available information and certain assumptions that management believes are reasonable.

Molycorp Silmet

        On April 1, 2011, Molycorp acquired 80% of the outstanding shares of Molycorp Silmet from AS Silmet Grupp in exchange for 1,593,419 shares of Molycorp common stock contractually valued at $80.0 million based on the average closing price of the Company's common stock as reported by The New York Stock Exchange for the 20 consecutive trading days immediately preceding April 1, 2011, the acquisition date.

        Generally, the acquisition-date fair value of shares of common stock transferred by the acquirer is the closing price of that stock on the same date adjusted by a discount that a market participant would require as a result of any restrictions on the sale or transferability of the stock. The fair value of common stock of $72.7 million disclosed in the table above is based on the closing price of the Company's common stock on the acquisition date, net of an estimated discount of 23% that a market participant would require given that issuance of the shares of common stock Molycorp transferred in consideration to AS Silmet Grupp was not registered under the Securities Act of 1933 and such shares

14

MOLYCORP, INC.
(A Company in the Development Stage)

Notes to Condensed Consolidated Financial Statements (Continued)

March 31, 2012

(Unaudited)

(10) Acquisitions (Continued)

were subject to certain lock-up provisions, which limited AS Silmet Grupp's ability to sell these shares. AS Silmet Grupp retained a 9.977% ownership interest in Molycorp Silmet on the acquisition date; Molycorp acquired the other 10.023% from Treibacher Industrie AG for $9.0 million in cash also on April 1, 2011.

        On October 24, 2011, the Company acquired the remaining 9.977% ownership interest in Molycorp Silmet for $10.0 million in cash, which resulted in an adjustment to Additional Paid-In Capital of $0.4 million for the difference between the consideration paid and the carrying value of the noncontrolling interest at October 24, 2011.

        The Molycorp Silmet acquisition provides Molycorp with a European base of operations and increases the Company's yearly REOs production capacity by approximately 3,000 mt. Molycorp Silmet sources a portion of rare earth feed stocks for production of its products primarily from the Molycorp Mountain Pass facility. The main focus of Molycorp Silmet is on the production of REOs and metals, including didymium metal, a critical component in the manufacture of NdFeB permanent rare earth magnets. Molycorp Silmet's manufacturing operation is located in Sillamäe, Estonia.

MMA

        On April 15, 2011, Molycorp completed the acquisition from Santoku Corporation ("Santoku") of all the issued and outstanding shares of capital stock of Santoku America, Inc., which is now known as MMA, an Arizona based corporation, in an all-cash transaction for $17.5 million. The acquisition provides Molycorp with access to certain intellectual properties relative to the development, processing and manufacturing of neodymium and samarium magnet alloy products. As part of the stock purchase agreement, Santoku will provide consulting services to Molycorp for the purpose of maintaining and enhancing the quality of MMA's products. Molycorp and Santoku also entered into five-year marketing and distribution agreements for the sale and distribution of neodymium and samarium magnet alloy products produced by each party. Additionally, the parties entered into a rare earth products purchase and supply agreement through which MMA will supply Santoku with certain rare earth alloys for a two-year period at prices equal to the feedstock cost plus the applicable product premium as such terms are defined in the agreement.

15

MOLYCORP, INC.
(A Company in the Development Stage)

Notes to Condensed Consolidated Financial Statements (Continued)

March 31, 2012

(Unaudited)

(11) Accrued Expenses

        Accrued expenses at March 31, 2012 and December 31, 2011 consisted of the following (in thousands):

	March 31, 2012		December 31, 2011
Defined contribution plan	$	782	$	1,088
Accrued payroll and related benefits		3,053		3,024
Sales and use tax		1,272		1,367
Bonus accrual		582		4,845
Interest payable		2,192		345
Unrealized loss on derivatives		6,641		265
Other accrued expenses		980		1,964
Total accrued expenses	$	15,502	$	12,898

(12) Asset Retirement Obligation

        The following table presents the activity in the Company's asset retirement obligation for the three months ended March 31, 2012, and for the year ended December 31, 2011 (in thousands):

	Three Months Ended March 31, 2012			Year Ended December 31, 2011
Balance at beginning of period	$	15,541		$	12,471
Obligations settled		(124	)		(1,030	)
Accretion expense		251			955
Revisions in estimated cash flows		1,919			2,508
Gain on settlement		—			637
Balance at end of period	$	17,587		$	15,541

        The Company is required to provide the applicable governmental agencies with financial assurances relating to its closure and reclamation obligations. At March 31, 2012, the Company had financial assurance requirements of $28.8 million, which were satisfied with surety bonds placed with California state and regional agencies.

16

MOLYCORP, INC.
(A Company in the Development Stage)

Notes to Condensed Consolidated Financial Statements (Continued)

March 31, 2012

(Unaudited)

(13) Debt

        The following tables provide a summary of the current and non-current portions of the debt outstanding at March 31, 2012 and December 31, 2011 (in thousands):

	March 31, 2012
	Current		Non-Current
Convertible Notes 3.25%, net of discount, due June 2016	$	—	$	192,793
Bank loans 2.69% - 3.88% due September 2012 - September 2017		1,383		5,124
Total debt	$	1,383	$	197,917

	December 31, 2011
	Current		Non-Current
Convertible Notes 3.25%, net of discount, due June 2016	$	—	$	190,877
Bank loans 2.69% - 3.88% due February 2012 - September 2017		1,516		5,668
Total debt	$	1,516	$	196,545

        Scheduled minimum debt repayments are $1.3 million for the remainder of 2012, $1.5 million in 2013, $1.5 million in 2014, $1.4 million in 2015, $230.6 million in 2016, $0.3 million in 2017 and zero thereafter.

(14) Income Taxes

        At March 31, 2012, the Company's net income of $71.9 million since the Corporate Reorganization included $31.9 million in certain stock-based compensation expense, which is a permanent difference between its income for financial reporting and tax purposes. Other permanent differences include legal and due diligence fees related to the acquisitions that were completed in April 2011, as well as costs related to the registration of common stock sold by certain stockholders in secondary offerings completed during the first and second quarters of 2011. Molycorp had net deferred income tax liabilities of $16.5 million as of March 31, 2012.

        Prior to the second quarter of 2011, Molycorp had a history of losses and, as a result, it recognized a full valuation allowance against its net deferred tax assets. As of March 31, 2012, Molycorp determined that it, more likely than not, will realize its deferred tax assets and concluded that no valuation allowance is required. In making this determination, management analyzed, among other things, the Company's recent history of earnings and cash flows, forecasts of future earnings, and the nature and timing of future deductions and benefits represented by the deferred tax assets and liabilities.

        The Company has undistributed earnings of its foreign subsidiary at March 31, 2012, for which deferred taxes have not been provided. Such earnings are considered indefinitely invested in the foreign

17

MOLYCORP, INC.
(A Company in the Development Stage)

Notes to Condensed Consolidated Financial Statements (Continued)

March 31, 2012

(Unaudited)

(14) Income Taxes (Continued)

subsidiary. If such earnings were repatriated, additional tax expense may result, although the calculation of such additional taxes is not practicable.

        The net tax effect of the elimination in consolidation of intercompany balances and transactions resulted in a deferred charge and income tax payable of $6.9 million at March 31, 2012.

(15) Stockholders' Equity

        At March 31, 2012 and December 31, 2011, the Company had 96,396,043 and 83,896,043 shares of common stock outstanding, respectively, and 2,070,00 shares of 5.50% Series A Mandatory Convertible Preferred Stock ("Convertible Preferred Stock") outstanding.

        On March 8, 2012, Molibdenos y Metales S.A. ("Molymet"), the world's largest processor of molybdenum and rhenium, headquartered in Santiago, Chile, purchased 12.5 million shares of the Company's common stock for $390.1 million, net of stock issuance costs of $0.1 million, at a purchase price of $31.218 per share, which price was determined based on the average daily volume weighted average price of the Company's common stock on The New York Stock Exchange for the 20 consecutive trading days immediately preceding the date of the agreement, plus a 10% premium. Pursuant to this investment, Molymet acquired the right to nominate a member of the Company's Board of Directors for so long as Molymet owns a certain percentage of the Company's common stock.

        In February 2012, the Company declared a cash dividend of $1.375 per share on the Convertible Preferred Stock. The aggregate dividend of $2.8 million was paid on March 1, 2012 to holders of record at the close of business on February 15, 2012.

(16) Earnings (Loss) per Share

        For the three months ended March 31, 2012 and 2011, and cumulatively for the period from June 12, 2008 (Inception) through March 31, 2012, the cumulative undeclared and paid dividends on the Convertible Preferred Stock for the period were subtracted from net (loss) income attributable to Molycorp stockholders for the period for the purpose of computing the basic and diluted earnings per share. The cumulative undeclared and paid dividends on the Convertible Preferred Stock for the three

18

MOLYCORP, INC.
(A Company in the Development Stage)

Notes to Condensed Consolidated Financial Statements (Continued)

March 31, 2012

(Unaudited)

(16) Earnings (Loss) per Share (Continued)

months ended March 31, 2011 was revised for an immaterial amount that had no impact on the basic and diluted loss per share for that period.

(In thousands, except share and per share amounts)	Three Months Ended March 31, 2012			Three Months Ended March 31, 2011			Total from June 12, 2008 (Inception) Through March 31, 2012
Net (loss) income attributable to Molycorp stockholders	$	(3,478	)	$	(2,198	)	$	21,421
Cumulative undeclared and paid dividends on Convertible Preferred Stock		(2,846	)		(1,423	)		(12,808	)
(Loss) income attributable to common stockholders		(6,324	)		(3,621	)		8,613
Weighted average common shares outstanding—basic		87,006,460			82,253,700			60,086,657
Basic (loss) income per share	$	(0.07	)	$	(0.04	)	$	0.14
Weighted average common shares outstanding—diluted		87,006,460			82,253,700			60,087,803
Diluted (loss) income per share	$	(0.07	)	$	(0.04	)	$	0.14

        Diluted earnings per share reflect the dilutive impact of potential common stock and unvested restricted shares of common stock in the weighted average number of common shares outstanding during the period, if dilutive. For this purpose, the "treasury stock method" and "if-converted method," as applicable, are used.

        Under the treasury stock method, assumed proceeds upon the exercise of stock options are considered to be used to purchase common stock at the average market price of the shares during the period. Also under the treasury stock method, fixed awards and nonvested shares, such as restricted stock, are deemed options for purposes of computing diluted earnings per share. As of March 31, 2012 and 2011, all potential common stock under the treasury stock method were antidilutive in nature; consequently, the Company does not have any adjustments between earnings per share and diluted earnings per share related to stock options and restricted stock awards.

        In applying the if-converted method, conversion is not assumed for purposes of computing diluted earnings per share if the effect would be antidilutive. Convertible preferred stock (such as the Convertible Preferred Stock) is antidilutive whenever the amount of the dividend declared in or accumulated for the current period including the deemed dividend in the period from a beneficial conversion feature per common share obtainable on conversion exceeds basic earnings per share. The Convertible Preferred Stock was antidilutive as of March 31, 2012 and 2011. Also under the if-converted method, convertible debt (such as the Convertible Notes) is antidilutive whenever its interest including any deemed interest from a beneficial conversion feature and nondiscretionary adjustments, net of tax, per common share obtainable on conversion exceeds basic earnings per share. As of March 31, 2012, the Convertible Notes were antidilutive.

19

MOLYCORP, INC.
(A Company in the Development Stage)

Notes to Condensed Consolidated Financial Statements (Continued)

March 31, 2012

(Unaudited)

(17) Stock-Based Compensation

        On March 1, 2012, certain of the non-employee directors of the Company elected to convert a portion of their quarterly fees into restricted stock units ("RSUs") based on the Company's common stock price on that day. These RSUs are fully vested because they relate to services already rendered by the non-employee directors. The same non-employee directors received additional RSUs as matching contributions by the Company equal to 25% of the converted RSUs. The matching RSUs vest on the third anniversary of the grant date.

        On February 28, 2012, the Company granted RSUs and performance-based restricted stock units ("PBRSUs") to the Company's named executive officers and certain employees under the 2010 Equity and Performance Incentive Plan. The RSUs vest on the third anniversary of the grant date. The PBRSUs will vest with respect to between 0% and 150% on the basis of the achievement of certain management objectives measured by specified levels of total shareholder return relative to a defined index group over the performance period from January 1, 2012 through December 31, 2014, or upon the occurrence of certain change of control or termination events.

        On February 2, 2012, certain named executive officers and other employees of the Company elected to convert a portion of their 2011 annual cash bonuses into RSUs. These RSUs are fully vested because they relate to services already rendered by the grantees. The conversion of the 2011 annual bonuses into RSUs resulted into an increase in Additional Paid-In Capital of $0.6 million. The same named executive officers and other employees received additional RSUs as matching contribution by the Company equal to 25% of the converted RSUs. The matching RSUs vest on the third anniversary of the grant date.

        The grant-date fair value of RSUs is determined using the Company's common stock price on the date of grant and is recognized as stock-based compensation expense on a straight-line basis over the three-year vesting period for the awards that are expected to vest.

        The grant-date fair value of PBRSUs is determined using a lattice approach that incorporates a Monte Carlo simulation model. The compensation cost associated with the PBRSUs is recognized straight-line over the performance period for the awards that are expected to vest, even if the market conditions are never satisfied.

        The following tables summarize the activity related to stock-based awards during the first quarter of 2012:

PBRSUs	Number of Shares		Weighted Average Grant-Date Fair Value
Unvested at January 1, 2012		—		—
Granted		45,553	$	30.33
Forfeited		—		—
Vested		—		—
Unvested at March 31, 2012		45,553	$	30.33

20

MOLYCORP, INC.
(A Company in the Development Stage)

Notes to Condensed Consolidated Financial Statements (Continued)

March 31, 2012

(Unaudited)

(17) Stock-Based Compensation (Continued)

RSUs	Number of Shares			Weighted Average Grant-Date Fair Value
Unvested at January 1, 2012		78,544		$	56.55
Granted		188,844		$	26.43
Forfeited		—			—
Vested*		(20,683	)	$	29.06
Unvested at March 31, 2012		246,705		$	35.80

*

Represents deferral and conversion of a portion of fees payable to certain non-employee directors of the Company, and deferral and conversion of a portion of the 2011 annual cash bonuses paid to certain executive officers and other employees of the Company.

RSAs	Number of Shares			Weighted Average Grant-Date Fair Value
Unvested at January 1, 2012		48,924		$	40.20
Granted		—			—
Forfeited		(221	)	$	48.87
Vested		—			—
Unvested at March 31, 2012		48,703		$	40.16

        The following tables summarize the activity related to stock options during the first quarter of 2012:

	March 31, 2012
Stock Options	Number of Shares		Weighted Average Exercise Price
Outstanding at January 1, 2012		52,819	$	48.87
Granted		—		—
Exercised		—		—
Forfeited and expired		—		—
Outstanding at March 31, 2012		52,819	$	48.87
Options exercisable at March 31, 2012		17,606	$	48.87

        The total stock-based compensation associated with all equity awards was $0.8 million, $2.9 million and $34.4 million for the three months ended March 31, 2012 and 2011, and for the period from June 12, 2008 (inception) through March 31, 2012, respectively.

21

MOLYCORP, INC.
(A Company in the Development Stage)

Notes to Condensed Consolidated Financial Statements (Continued)

March 31, 2012

(Unaudited)

(18) Commitments and Contingencies

(a)    Future Operating Lease Commitments

        The Company has certain operating leases for office space, trailers and certain equipment. Remaining annual minimum payments under these leases at March 31, 2012 were $1.5 million for the remainder of 2012, $0.6 million in 2013, $0.5 million in 2014, $0.5 million in 2015, $0.5 million in 2016 and zero thereafter, totaling $3.6 million.

(b)    Capital Commitments

        In connection with the Molycorp Mountain Pass facility modernization and expansion and future operations, the Company entered into contractual commitments for the purchase of materials and services from various vendors. Future payments for these commitments are estimated at $384.7 million due over one and two years.

        Total capital spending for Project Phoenix Phase 1, Project Phoenix Phase 2 and other capital projects related to operations at Molycorp Mountain Pass for the remainder of 2012 is expected to be approximately $336.0 million. The Company is encountering cost pressures on its projects and management has initiated measures to mitigate certain adverse cost trends. While management is continuing to re-evaluate the impact on the Company's budgets, the Company will incur additional costs, which may be significant, if our mitigation measures are not successful.

(c)    Potential Environmental Obligations

        As part of its ongoing remediation efforts at the Molycorp Mountain Pass facility, the Company identified liner defects in three of the onsite evaporation ponds in 2011. This led to minor groundwater contamination issues that are limited to a small area directly underneath the evaporation ponds. In order to remediate this issue, the Company will replace the primary lining system and might have to install a groundwater recovery system. The Company estimated the cost of these items at between $2.4 million and $4.6 million, which will be treated as capital expenditures. The Company is in the process of finalizing the remediation plans with the Regional Water Quality board.

(d)    Labor Contract

        Certain Molycorp Mountain Pass facility employees are covered by a collective bargaining agreement with the United Steelworkers of America that expires on March 15, 2015. At March 31, 2012, 168 employees, or approximately 57% of the Company's workforce at the Molycorp Mountain Pass facility, were covered by this collective bargaining agreement.

        At March 31, 2012, 174 employees, or approximately 30% of the workforce at the Company's Molycorp Silmet facility, were unionized employees. The contract with the labor union in Estonia was renewed by the end of February 2012.

22

MOLYCORP, INC.
(A Company in the Development Stage)

Notes to Condensed Consolidated Financial Statements (Continued)

March 31, 2012

(Unaudited)

(18) Commitments and Contingencies (Continued)

(d)    Reclamation Surety Bonds

        At March 31, 2012, Molycorp had placed $28.8 million of surety bonds with California state and regional agencies to secure its Mountain Pass facility closure and reclamation obligations.

(e)    Purported class action and derivative lawsuits

        In February 2012, a purported class action lawsuit captioned, Angelo Albano, Individually and on Behalf of All Others Similarly Situated v. Molycorp, Inc., et al., was filed against the Company and certain of its executive officers in the U.S. District Court for the District of Colorado. This federal court action alleges, among other things, that the Company and those officers violated Section 10(b) of the Exchange Act in connection with statements relating to its third quarter fiscal 2011 financial results and fourth quarter 2011 production guidance that the Company had filed with or furnished to the SEC, or otherwise made available to the public. The plaintiffs are seeking unspecified damages and other relief. The Company believes the allegations are without merit and that it has valid defenses to such allegations. The Company intends to defend this action vigorously. The Company is unable to provide meaningful quantification of how the final resolution of these claims may impact its future consolidated financial position or results of operations.

        Seven stockholder derivative lawsuits have been filed in three different jurisdictions purportedly on behalf of Molycorp, Inc., against certain of its directors, certain of its officers, and certain of its private equity investors. These cases have been filed in the Delaware Chancery Court, the U.S. District Court in Colorado, and the District Court in Arapahoe County, Colorado. They are captioned: Gaines v. Smith et al., Case No. 7282 (Del. Ch. Feb. 12, 2012); Paskowitz v. Smith et al., Case No. 7319 (Del. Ch. Mar. 9, 2012); Wilson v. Smith et al., No. 7395-VCN (Del. Ch. April 4, 2012); Wells v. Smith et al., No. 1:12-cv-00447-WJM (D. Colo. Feb. 21, 2012); Swaggerty v. Smith et al., No. 12-cv-00589-CMA-KLM (D. Colo. Mar. 7, 2012); Clem v. Smith et al., No. 12 CV 392 (Arapahoe Cnty., Colo. Feb. 24, 2012); and Nationwide Consulting, Inc. v. Smith et al., No. 12 CV 448 (Arapahoe Cnty., Colo. Mar. 5, 2012). The Clem and Nationwide cases have since been consolidated under the caption Clem v. Smith et al., No. 12 CV 392 (Arapahoe Cnty., Colo.).

        The derivative complaints challenge among other things certain sales of stock by officers, directors and private equity firms, and certain Molycorp corporate acquisitions during 2011. The complaints assert causes of action for: (1) alleged breaches of fiduciary duty, including the duties of loyalty and due care; (2) alleged unjust enrichment; (3) alleged waste of corporate assets; and (4) alleged "abuse of control." On behalf of Molycorp, the plaintiffs in the derivative actions seek, among other things, monetary damages, restitution, an accounting, and certain changes to corporate governance procedures.

        The Defendants have filed a motion in each case seeking to consolidate the derivative actions in one jurisdiction, and have expressed a preference for the Delaware Court of Chancery.

        The Defendants deny allegations in the derivative complaints and will vigorously contest the claims in each lawsuit.

23

MOLYCORP, INC.
(A Company in the Development Stage)

Notes to Condensed Consolidated Financial Statements (Continued)

March 31, 2012

(Unaudited)

(19) Concentrations

(a)    Limited Number of Products

Molycorp Mountain Pass

        Percentages of Molycorp Mountain Pass' revenue, net of intercompany sales, by product that accounted for more than 10% of consolidated sales in the first quarter of 2012 or 2011, were approximately as follows:

	March 31, 2012			March 31, 2011
Lanthanum products		46	%		44	%
Cerium products		1	%		34	%
Didymium, Neodymium and Praseodymium products		53	%		18	%

Molycorp Silmet

        The majority of sales from the Molycorp Silmet facility during the first quarter of 2012, net of intercompany sales, consisted of cerium, neodymium and praseodymium rare earth products, and two rare metal products, tantalum and niobium.

MMA

        The MMA facility sold primarily NdFeB alloys and samarium-cobalt alloys during the first quarter of 2012. MMA's sales of NdFeB alloys for the same period were approximately 19% of consolidated sales.

(b)    Limited Number of Customers

Molycorp Mountain Pass

        In the first quarter of 2012, Molycorp Mountain Pass' sales to two of its customers in excess of 10% of consolidated sales were $20.4 million and $17.2 million, respectively. Molycorp Mountain Pass' sales to three of its customers, net of intercompany sales, represented in total approximately 98% of Molycorp Mountain Pass' sales in same period.

        For the three months ended March 31, 2011, approximately 75% of Molycorp Mountain Pass' total sales were to three of its customers. Sales to these three customers were approximately $7.8 million, $6.2 million and $5.8 million, respectively.

Molycorp Silmet

        Sales to four of Molycorp Silmet's customers during the first quarter of 2012 represented, in aggregate, approximately 57% of Molycorp Silmet's sales for that period.

24

MOLYCORP, INC.
(A Company in the Development Stage)

Notes to Condensed Consolidated Financial Statements (Continued)

March 31, 2012

(Unaudited)

(19) Concentrations (Continued)

MMA

        MMA's sales to one of its customers for the three months ended March 31, 2012, were $16.6 million, or approximately 20% of the Company's consolidated sales, and approximately 88% of MMA's sales for that period.

(20) Related-Party Transactions

        The Company made principal payments of $0.9 million and $3.1 million for the three month period ended March 31, 2012 and for the year ended December 31, 2011, respectively, under the inventory financing arrangement with Traxys North America LLC ("Traxys and affiliates"), the parent of one of the Company's stockholders, TNA Moly Group, LLC. The outstanding amounts payable to Traxys and affiliates under this arrangement were zero and $0.9 million reported on the condensed consolidated balance sheet at March 31, 2012 and December 31, 2011, respectively, under Short-term borrowing—related party, and zero and $2.8 million in Trade Accounts Payable related to the sales made, but not remitted to Traxys and affiliates at March 31, 2012 and December 31, 2011, respectively.

        The Company and Traxys and affiliates also jointly market and sell certain lanthanum oxide, cerium oxide, misch metal and erbium oxide products. Per the terms of this other arrangement, the Company and Traxys and affiliates split gross margin equally once all costs associated with the sale are recovered by both parties. The Company had an outstanding related payable to Traxys and affiliates in the amount of $65,000 and $169,000 at March 31, 2012 and December 31, 2011, respectively.

        During 2011, the Company made purchases of lanthanum oxide from Traxys and affiliates in the amount of $6.2 million, and purchases of yttrium and bastnasite material of approximately $0.7 million.

        At March 31, 2012 and December 31, 2011, Molycorp Silmet had a balance receivable from Traxys and affiliates of $0.4 million and $2.1 million, respectively, related to sales of tantalum metal to Traxys and affiliates of $3.2 million in 2011.

25

MOLYCORP, INC.
(A Company in the Development Stage)

Notes to Condensed Consolidated Financial Statements (Continued)

March 31, 2012

(Unaudited)

(21) Net Change in Operating Assets and Liabilities

        Net cash used in (provided by) operating activities related to changes in operating assets and liabilities, net of the effects of acquisitions and dispositions, consist of the following:

(In thousands)	Three Months Ended March 31, 2012			Three Months Ended March 31, 2011			Total from June 12, 2008 (Inception) through March 31, 2012
Decrease (increase) in operating assets:
Accounts receivable	$	25,408		$	(1,160	)	$	(44,368	)
Inventory		(4,442	)		(1,175	)		(82,654	)
Prepaid expenses and other assets		382			(874	)		(7,004	)
Increase (decrease) in operating liabilities:
Accounts payable		(13,924	)		2,803			6,494
Prepaid income taxes		1,560			—			(16,272	)
Asset retirement obligation		—			(165	)		(2,049	)
Accrued expenses		(4,605	)		2,074			8,032
	$	4,379		$	1,503		$	(137,821	)

(22) Supplemental Cash Flow Information

(In thousands)	Three Months Ended March 31, 2012		Three Months Ended March 31, 2011		Total from June 12, 2008 (Inception) through March 31, 2012
Non-cash financing activities and investing activities:
Conversion of short-term borrowings from member plus accrued interest, into common shares	$	—	$	—	$	6,831
Change in accrued capital expenditures	$	55,226	$	14,896	$	172,858

(23) Research and Development

        The Company has invested significant resources to improve the efficiency of its REOs processing operations, the development of new applications for individual rare earth elements and exploratory drilling. For the three months ended March 31, 2012 and 2011, and cumulatively for the period from June 12, 2008 (Inception) through March 31, 2012, the Company spent $3.9 million, $1.5 million and $16.5 million, respectively, on research and development. These costs are included in selling, general and administrative expenses on the condensed consolidated statements of operations and comprehensive income, and consist primarily of salaries, outside labor, material and equipment.

26

MOLYCORP, INC.
(A Company in the Development Stage)

Notes to Condensed Consolidated Financial Statements (Continued)

March 31, 2012

(Unaudited)

(24) Derivative Instruments

        On March 28, 2012, the Company entered into a contingent forward contract to purchase Canadian dollars ("Cdn") with a notional amount of Cdn$870.0 million to manage the foreign currency exposure with respect to its planned acquisition of Neo Material Technologies Inc. ("Neo"). The Company did not apply hedge accounting to this contingent foreign currency forward contract. As a result, the change in the fair value of this derivative instrument resulted in an unrealized loss of $6.7 million for the quarter ended March 31, 2012, recorded as part of Other expense. This derivative has a maturity of September 4, 2012. The derivative fair value of $6.7 million at March 31, 2012 was recorded in Accrued expenses.

        During the third quarter of 2011, the Company, through its subsidiary, Molycorp Minerals, entered into three derivative forward contracts to manage its foreign currency exposure with respect to Euro denominated purchases of certain equipment. The Company did not apply hedge accounting to these foreign currency forward contracts. Two of these derivatives were settled during the first quarter of 2012 resulting in a realized loss of $0.2 million, the majority of which was previously recorded in the last two quarters of 2011 as unrealized expense under Other expense. The change in the fair value of the third derivative contract not yet settled at March 31, 2012, resulted in an unrealized loss of approximately $40,000, the majority of which was already recorded in the last two quarters of 2011 under Other expense.

        The Company accounts for derivative instruments using the fair value method. GAAP provides for a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Level 1 inputs are quoted market prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted market prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability.

        The fair value measurement of the derivative forward contracts outstanding at March 31, 2012, was determined using internally developed discounted cash flow models. The inputs to these models consisted of, or were derived from, observable Level 2 data for substantially the full term of each derivative instrument. The internally determined fair value was then compared to the fair value assessment from the counterparties to these derivative contracts; large or unexpected differences between the Company's internal valuation and the fair value assessment from the counterparties were investigated and reconciled.

        The Company expects that the values to be realized on these derivatives will be based on market conditions at the time of settlement, which will occur at the maturity of each derivative instrument.

(25) Recent Accounting Pronouncements

        In September 2011, the FASB issued ASU 2011-08, Testing Goodwill for Impairment. Under this updated guidance, an entity will have the option to first assess qualitatively whether it is necessary to perform the current two-step goodwill impairment test. If an entity believes, as a result of its qualitative assessment, that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is required. Otherwise, no further testing is necessary. The

27

MOLYCORP, INC.
(A Company in the Development Stage)

Notes to Condensed Consolidated Financial Statements (Continued)

March 31, 2012

(Unaudited)

(25) Recent Accounting Pronouncements (Continued)

update does not change how an entity performs the two-step impairment test under the current guidance. This ASU is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted. The Company does not expect the adoption of this updated guidance to have a significant impact on its financial statements.

        In December 2011, the FASB issued ASU 2011-12, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in ASU 2011-05. ASU 2011-12 defers the requirement that companies present reclassification adjustments for each component of Accumulated Other Comprehensive Income ("AOCI") in both net income and other comprehensive income on the face of the financial statements.

        Companies will continue to be required to present amounts reclassified out of AOCI on the face of the financial statements or disclose those amounts in the notes to the financial statements. During the deferral period, there is no requirement to separately present or disclose the reclassification adjustments into net income. For the period ended March 31, 2012, the Company did not have any reclassification adjustments for components of AOCI.

(26) Subsequent Events

Preferred stock dividend

        In May 2012, the Company declared a cash dividend of $1.375 per share on the Convertible Preferred Stock. The aggregate dividend of $2.8 million will be paid on June 1, 2012 to holders of record at the close of business on May 15, 2012.

28

ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

        In this Quarterly Report on Form 10-Q, unless the context requires otherwise, references to "Molycorp," "we," "our" or "us" refer to Molycorp, Inc. and its consolidated subsidiaries after the Corporate Reorganization (as described below). As used herein, a ton is equal to 2,000 pounds, the term "mt" means a metric tonne (equal to 2,205 pounds), and the term "Rest of World" means the entire world except China. For definitions of certain rare earth-related and mining terms, see "Glossary of Selected Mining Terms."

        This Quarterly Report on Form 10-Q contains forward-looking statements that represent our beliefs, projections and predictions about future events or our future performance. You can identify forward-looking statements by terminology such as "may," "will," "would," "could," "should," "expect," "intend," "plan," "anticipate," "believe," "estimate," "predict," "potential," "continue" or the negative of these terms or other similar expressions or phrases. These forward-looking statements are necessarily subjective and involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance or achievements or industry results to differ materially from any future results, performance or achievement described in or implied by such statements.

        Risk factors and uncertainties that may cause actual results to differ materially from expected results include, among others: our ability to successfully complete the proposed acquisition of Neo Material Technologies Inc., or Neo; our ability to successfully integrate Neo with our operations; our ability to achieve fully the strategic and financial objectives related to the proposed acquisition of Neo, including the acquisition's impact on our financial condition and results of operations; and unexpected costs or liabilities that may arise from the acquisition, ownership or operation of Neo.

        Additional risk factors that may cause actual results to differ materially from expected results described in forward-looking statements include, but are not limited to: the potential need to secure additional capital to implement our business plans; our ability to complete our planned capital projects, such as our initial modernization and expansion efforts, including the accelerated start-up of our Mountain Pass, California rare earth mine and processing facility, or the Molycorp Mountain Pass facility, which we refer to as Project Phoenix Phase 1, and our second phase capacity expansion plan, which we refer to as Project Phoenix Phase 2, and reach full planned production rates for rare earth oxides, or REOs, and other planned downstream products, in each case within the projected time frame; the success of our cost mitigation efforts in connection with Project Phoenix, which if unsuccessful, might cause our costs to exceed budget; the final costs of our planned capital projects, such as Project Phoenix Phase 1, including the accelerated start-up of the Molycorp Mountain Pass facility, and Project Phoenix Phase 2, which may differ from estimated costs; uncertainties associated with our reserve estimates and non-reserve deposit information, including estimated mine life and annual production; uncertainties related to feasibility studies that provide estimates of expected or anticipated costs, expenditures and economic returns; and REOs prices, production costs and other expenses for operations, which are subject to fluctuation; uncertainties regarding global supply and demand for rare earths materials; uncertainties regarding the results of our exploratory drilling programs; our ability to enter into additional definitive agreements with our customers and our ability to maintain customer relationships; the sintered neodymium-iron-boron, or NdFeB, rare earth magnet joint venture's ability to successfully manufacture magnets within its expected timeframe; our ability to successfully integrate acquired businesses; our ability to maintain appropriate relations with unions and employees; our ability to successfully implement our "mine-to-magnets" strategy; environmental laws, regulations and permits affecting our business, directly and indirectly, including, among others, those relating to mine reclamation and restoration, climate change, emissions to the air and water and human exposure to hazardous substances used, released or disposed of by us; uncertainties associated with unanticipated geological conditions related to mining; and those risks discussed and referenced in the

29

section entitled "Risk Factors" described in our Annual Report on Form 10-K for the year ended December 31, 2011.

        Any forward-looking statement you read in this Quarterly Report on Form 10-Q reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, operating results, growth strategy and liquidity. You should not place undue reliance on these forward-looking statements because such statements speak only as to the date when made. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future, except as otherwise required by applicable law.

        The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included herein. This Quarterly Report on Form 10-Q also contains statistical data and estimates we obtained from industry publications and reports generated by third parties. Although we believe that the publications and reports are reliable, we have not independently verified their data.

Overview

Presentation

        Molycorp, Inc. was formed on March 4, 2010 for the purpose of continuing the business of Molycorp, LLC in corporate form. On April 15, 2010, pursuant to the Contribution Agreement, the members of Molycorp, LLC contributed either (a) all of their member interests in Molycorp, LLC or (b) all of their equity interest in entities that held member interests in Molycorp, LLC (and no other assets or liabilities) to Molycorp, Inc. in exchange for Molycorp, Inc. Class A common stock. Accordingly, Molycorp, LLC and its wholly owned subsidiary, Molycorp Minerals, LLC, or Molycorp Minerals, became subsidiaries of Molycorp, Inc., which we refer to as the Corporate Reorganization. On June 15, 2010, Molycorp LLC was merged with and into Molycorp Minerals.

        We have three operating segments: Molycorp Mountain Pass, Molycorp Metals and Alloys ("MMA") and Molycorp Silmet. Each of the segments has only one production and shipping location. Sales to external customers by geographic area are based on the location in which the sale originated.

Recent Developments

Planned acquisition of Neo Material Technologies Inc.

        On March 8, 2012, we and Neo executed a definitive agreement, or Arrangement Agreement, under which we will acquire Neo for approximately Cdn $1.3 billion. The proposed Neo acquisition is expected to create one of the most technologically advanced, vertically integrated rare earth companies in the world. Under the Arrangement Agreement, which was unanimously approved by Neo's and our Board of Directors, Neo shareholders may elect to receive either (i) cash consideration equal to Cdn $11.30 per share, (ii) share consideration of either 0.4242 shares of our common stock or 0.4242 shares issued by MCP Exchangeco Inc., our wholly owned Canadian subsidiary, which we refer to as the Exchangeable Shares (which are exchangeable for shares of our common stock), per share or (iii) a combination of cash and Exchangeable Shares and/or shares of our common stock, provided that the aggregate consideration received by Neo shareholders will be pro-rated to approximately 71.2% in cash ($926 million) (Cdn $926 million)) and approximately 28.8% in Exchangeable Shares and/or shares of our common stock.

        In addition, Neo currently has $230.0 million in aggregate principal amount of convertible debentures outstanding, which we refer to as the Neo debentures. Pursuant to the indenture governing the Neo debentures, holders of the Neo debentures will have the opportunity to convert their Neo

30

debentures into shares of Neo common stock as a result of the proposed Neo acquisition. That conversion takes place at a ratio of 72.4637 shares of Neo common stock per $1,000 principal amount of Neo debentures. In addition, if holders convert their Neo debentures into shares of Neo common stock pursuant to certain prescribed procedures in the indenture, then they will be entitled to a number of additional "make-whole" shares of Neo common stock calculated pursuant to a matrix set forth in the indenture. Given the variables in the indenture, we will not be able to calculate the number of "make-whole" shares issuable upon conversion of Neo debentures until after the closing of the proposed Neo acquisition; however, we anticipate that between 18 and 20 "make-whole" shares will be issued for each $1,000 in principal amount of Neo debentures converted. In total, we anticipate that holders of Neo debentures will convert their Neo debentures into between 20 million and 23 million shares of Neo common stock. As a result of the proposed Neo acquisition, holders of Neo debentures that elect to convert their Neo debentures into shares of Neo common stock will, instead of receiving shares of Neo common stock, receive the consideration mix received by Neo's common shareholders in the proposed Neo acquisition contemplated by the Arrangement Agreement.

        The Cdn $11.30 per share represents a premium of approximately 42% to Neo's closing share price of Cdn $7.97 on March 8, 2012. The proposed combination of Molycorp and Neo will expand Molycorp's geographic footprint across 11 countries and provide leading product development, research, and sales capabilities. Additionally, we will gain cutting-edge technologies and will leverage Neo's years of processing experience and knowledge, to better service our customer base as well as new customer segments. The proposed acquisition will bring to us direct operating and sales channels in China, the world's largest and fastest growing rare earth consuming nation. In 2010 and 2011, Neo's sales to China and Japan, collectively, accounted for approximately 68% and 64% of its total sales, respectively.

        The proposed acquisition will expand our technology portfolio to include production of magnetic powders, zirconium based engineered materials, and rare metals including gallium, indium and rhenium, which will enable us to produce and market materials that are integral to a wide variety of strategic technologies, including advanced electronics, thin film photovoltaic, light-emitting diode, or LED, flat panel display, super alloys, catalytic converters, mobile and smart phones, magnets, batteries. The addition of Neo expertise will provide entry for us into customer segments requiring value-added rare earth and rare metal production capabilities—up to 99.99999% purity for some elements.

Investment by Molibdenos y Metales S.A.

        On March 8, 2012, Molibdenos y Metales S.A., or Molymet, the world's largest processor of molybdenum and rhenium headquartered in Santiago, Chile, purchased 12.5 million shares of our common stock for $390.1 million, net of stock issuance costs of $0.1 million, at a purchase price of $31.218 per share, which price was determined based on the average daily volume weighted average price of our common stock on The New York Stock Exchange for the 20 consecutive trading days immediately preceding the date of the agreement, plus a 10% premium. Pursuant to this investment, Molymet acquired the right to nominate a member of our Board of Directors, for so long as Molymet owns a certain percentage of our common stock.

Intermetallics Japan Joint Venture

        On November 28, 2011, Molycorp, Daido Steel Co., Ltd., or Daido, and Mitsubishi Corporation, or Mitsubishi, formed a joint venture, Intermetallics Japan, or IMJ, to manufacture and sell next-generation NdFeB permanent rare earth magnets. The joint venture will manufacture sintered NdFeB permanent rare earth magnets with technology licensed from Intermetallics, Inc., a partnership between Mitsubishi, Daido and Dr. Masato Sagawa, co-inventor of the NdFeB magnet. The new company will take full advantage of Daido's commercial scale magnet manufacturing technologies, Mitsubishi's domestic and international marketing and sales network and Molycorp's REOs, metals, and alloy

31

manufacturing resources and capabilities. The capital contribution ratio of the newly formed company is 30.0% by Molycorp, 35.5% by Daido and 34.5% by Mitsubishi. We will contribute, upon achievement of certain milestones and subject to our Board of Directors' approval, Japanese Yen (JPY) 2.5 billion in cash (or approximately $30.4 million based on the JPY/ U.S. dollar exchange rate as of March 31, 2012), in exchange of ordinary shares of the joint venture over a period of twelve months. On March 12, 2012, we made our first contribution of $3.8 million to IMJ.

        Additionally, IMJ will be partially financed by a government subsidy sponsored by Japan's Ministry of Economy, Trade, and Industry. IMJ plans to construct an initial 500 metric-ton-per-year magnet manufacturing facility in Nakatsugawa, Japan (Gifu Prefecture), with operations expected to commence by January 2013.

        The joint venturers began working on the new facility in late December 2011 and expect to eventually expand operations in the United States and elsewhere. The technology to be used by IMJ is a new and novel approach that does not depend on the use of patents held by other magnet companies. This technology allows for the manufacture of permanent rare earth magnets that deliver greater performance with less reliance on dysprosium, a relatively scarce rare earth. The process also results in higher production yields. Target markets for IMJ are the automotive and home appliance markets. These markets, as well as other markets for environmentally friendly technologies, are forecast to be significant drivers of demand growth for permanent rare earth magnets. IMJ has been provisionally awarded a supply agreement for a next-generation electric vehicle with a major automotive manufacturer.

        Concurrently with the formation of IMJ, we, Mitsubishi (acting as the procurement agent) and IMJ entered into a supply agreement pursuant to which we will sell to IMJ certain rare earth products under the conditions set forth in the supply agreement.

Our Business

        We are the largest REOs producer in the Western hemisphere and own one of the world's largest rare earth projects outside of China. We also own one of the largest rare earth oxides and rare metals producers in Europe, and the only producer of rare earth alloys in the United States. Upon the full execution of our "mine-to-magnets" strategy and completion of Project Phoenix Phase 1and Project Phoenix Phase 2, we expect to be one of the world's most integrated producers of rare earth products, including oxides, metals, alloys and magnets.

        Rare earth products are critical inputs in many existing and emerging applications including: clean energy technologies, such as hybrid and electric vehicles and wind power turbines; multiple high-tech uses, including fiber optics, lasers and hard disk drives; numerous defense applications, such as guidance and control systems and global positioning systems; and advanced water treatment technology for use in industrial, military and outdoor recreation applications. Global demand for rare earth elements, or REEs, is projected to steadily increase both due to continuing growth in existing applications and increased innovation and development of new end uses. We have made significant investments, and expect to continue to invest, in developing technologically advanced applications and proprietary applications for individual REEs. Our goals are:

•

develop innovative rare earth technologies and products vital to green energy, high-tech, defense and industrial applications;

•

be commercially sustainable, globally competitive, profitable and environmentally superior;

•

act as a responsible steward of our rare earth resources; and

•

use our technology to improve the daily lives of people throughout the world.

32

        Our objective is to be the rare earth products and technology company recognized for its "ETHICS"—Excellence, Trust, Honesty, Integrity, Creativity and Safety. Since July 2005, the Molycorp Mountain Pass facility has not had a lost-time accident and has received from the Mine Safety and Health Administration, or MSHA, the coveted Sentinels of Safety Award (2008, 2006 and 2004); the National Safety Council Awards—Perfect Record (2008, 2007, 2006, 2004); and the National Safety Council Awards—Occupational Excellence achievement award (2009, 2007 and 2004). Additionally, the MMA facility has not had a lost-time accident for the past 15 years and the Molycorp Silmet facility has had one lost-time accident in 2011, and one during the 12 months prior to the acquisition by us. The Molycorp Silmet facility is now reporting lost-time accidents consistently with the U.S. standard followed by the Molycorp Mountain Pass and MMA facilities.

Our Mine Process and Development Plans

        Processing at our Molycorp Mountain Pass facility entails mining the bastnasite ore followed by crushing and milling it to a fine powder. Milled bastnasite ore is then processed by flotation whereby the bastnasite, which is a mineral containing light and heavy rare earth elements, floats to the surface and is separated from the waste material, which sinks in a series of flotation cells. The resultant bastnasite concentrate is then processed by leaching (cracking) with acid solutions followed by a series of solvent-extraction separation steps that produce various individual REOs, generally in a high purity oxide form.

        In December 2011, the U.S. Department of Interior Bureau of Land Management granted us authorization to commence exploratory drilling at an occurrence of heavy rare earths located near our Molycorp Mountain Pass facility. Preliminary exploration at the site has shown rare earth mineralization with an average ore grade of approximately four percent and a relatively high percentage of heavy REEs, such as terbium, dysprosium, europium and samarium, as well as relatively high percentages of yttrium, neodymium, and praseodymium. This prospect is still at an early stage of exploration and the commercial feasibility of what has been found to date cannot be known at this time.

        Upon the completion of the construction of Project Phoenix Phase 1, we expect to have the capacity to produce approximately 19,050 mt of REOs per year at our Molycorp Mountain Pass facility by the beginning of the fourth quarter of 2012. Following the completion of Project Phoenix Phase 2 construction, which we expect to be by the end of the fourth quarter of 2012, we expect to have the ability to produce, if customer demand warrants, approximately 40,000 mt of REOs per year by mid-2013 at our Molycorp Mountain Pass facility, or approximately double the amount we expect to be able to produce upon completion of Project Phoenix Phase 1. Based on our estimated reserves and an expected annual production rate of approximately 19,050 mt of REOs under Project Phoenix Phase 1, the expected mine life of our Molycorp Mountain Pass mine is in excess of 30 years (SRK Consulting (U.S.), Inc., or SRK, has preliminarily indicated, however, that doubling the amount of production pursuant to Project Phoenix Phase 2 would reduce the current mine life to 22 years, assuming no additional exploration, conversion of known mineralized material to reserves, no realization of anticipated improvements in recoveries, and all other factors, such as cut-off grade, remain constant.)

        We expect the consummation of the IMJ joint venture described above, in conjunction with our modernization plans at our Molycorp Mountain Pass facility, the strategic acquisitions of Molycorp Silmet and MMA and the planned acquisition of Neo, to provide us with the capability to mine, process, separate and alloy individual REEs and manufacture them into NdFeB magnets. This downstream integration, which we refer to as our "mine-to-magnets" strategy, would make us the only fully integrated producer of NdFeB magnets outside of China, helping to secure a rare earth supply chain for the Rest of World. In addition to the foregoing, we continue to explore additional joint ventures or other arrangements with third parties for the production of NdFeB alloys and/or magnets.

33

Proven and probable mineral reserves update

        In April 2012, SRK issued a technical report on a new reserve estimate of the Molycorp Mountain Pass property to include an expanded pit boundary and revised recovery schedule. The expansion of the ultimate pit boundary and the associated increase in the size of the overburden stockpiles will require the modification of existing permits after 2021. SRK applied new capital expenditure assumptions to the original 2010 cash flow model to arrive at the new reserve estimate. As a result of this new study, SRK estimated total proven reserves of 26.3 million pounds of REOs contained in 0.156 million tons of ore, with an average ore grade of 8.45% REOs, and probable reserves of 2.91 billion pounds of REOs contained in 18.267 million tons of ore, with an average ore grade of 7.98% REOs, in each case using a cut-off grade of 5.0% REOs.

        The following tables present our current proven and probable reserves as compared to the prior estimation:

January 2012 estimation

Category of Reserves	Average Ore Grade (% REO)			Ore		Contained REOs
				(Millions of Tons)		(Millions of Pounds)
Proven		8.45	%		0.156		26.3
Probable		7.98	%		18.267		2,914

February 2010 estimation

Category of Reserves	Average Ore Grade (% REO)			Ore		Contained REOs
				(Millions of Tons)		(Millions of Pounds)
Proven		9.38	%		0.480		88
Probable		8.20	%		13.108		2,122

        The reduction in the proven reserves estimation, and the larger increase in the probable reserves estimation, from the 2010 to the 2012 study, is primarily due to the use of additional drilling data combined with the advantage of performing the new study from a deeper observation point at the bottom of the mine pit.

Our Products and Markets

        Since our acquisition of the Molycorp Mountain Pass facility, we have been producing and selling REOs from stockpiled feedstocks to significantly improve our solvent extraction technologies and capabilities and commercially demonstrate several other new processing technologies. As of March 31, 2012, we had achieved greater than 98% recovery in our solvent extraction units at commercial scale for cerium, lanthanum, and didymium, which we believe is one of the highest recovery rates in the world. We have also developed the expertise to produce the following REEs in many usable forms: bastnasite concentrate; cerium; lanthanum; neodymium; praseodymium; europium; samarium; gadolinium; dysprosium; and terbium. When used to describe the current recovery rate for our solvent extraction units, the term "commercial scale" means that the solvent extraction units are operating at such a production rate that the scale-up factor required to achieve the desired production rate is less than ten times the current production rate.

        We sell and transport a portion of the REOs we produce at our Molycorp Mountain Pass and Molycorp Silmet facilities to customers for use in their particular applications. The remainder of the REOs are processed into rare earth metals and rare earth alloys. We produce rare earth metals outside of the United States at our Molycorp Silmet facility and via toll manufacturing through third-party

34

tolling arrangements. A portion of these metals is sold to end-users, and we process the rest into rare earth alloys at our MMA facility in Arizona. With the Molycorp Silmet acquisition in 2011, we added two rare metals, tantalum and niobium, to our product mix.

        As of March 31, 2012, we have allocated 20% of Project Phoenix Phase 1 output to production of XSORBX®, our proprietary water treatment technology. In addition, we are in discussions with multiple large companies regarding the sale of XSORBX®, which could significantly expand demand for cerium-rich materials. We have begun to sell XSORBX® for commercial use in the wastewater, recreation, pool and spa, industrial process and other water treatment markets.

Key Industry Factors

Demand for Rare Earth Products

        Global consumption of REEs is projected to steadily increase due to continuing growth in existing applications and increased innovation and development of new end uses. For example, the integration of rare earth permanent magnet drives into wind power turbines has reduced the need for gearboxes, which increases overall efficiency and reliability. We believe that this anticipated market dynamic will underpin growing demand for REEs. If Molycorp Mountain Pass and other rare earth projects do not commence production when anticipated, we expect there will continue to be a gap between current and forecasted demand and supply.

Supply of Rare Earth Products

        China has dominated the global supply of REOs for the last fifteen years, and accounted for approximately 94% of global REOs production in 2011. Even with our planned production, global supply is expected to remain tight due to the combined effects of growing demand and actions taken by the Chinese government to restrict exports. As a result of the internal industrial development, as well as economic, environmental and regulatory factors in China, there is uncertainty with respect to the total planned production and availability of rare earth products from China. Export quotas imposed by the Chinese government have substantially decreased from 2008 to 2010, and remained virtually unchanged in 2011, thus reducing the amount of rare earth materials that China may export to the Rest of World. Despite the challenge to the Chinese export policy by some of the members of the World Trade Organization in early 2012, we believe the growing demand for REOs will continue to outstrip global supply in the future.

Factors Affecting Our Results

Modernization and Expansion of the Molycorp Mountain Pass Facility

        We anticipate a dramatic change in our business and results of operations upon the completion of Project Phoenix Phase 1 and Project Phoenix Phase 2 and the full execution of our "mine-to-magnets" strategy, through which we expect to produce rare earth magnets later in 2012 in addition to our current production of REOs, rare earth metals and rare earth alloys. We expect to increase our capacity and ability to produce and sell a significantly expanded slate of products, including specialty cerium products for water treatment; neodymium, praseodymium and dysprosium metals for NdFeB magnets; samarium cobalt alloys for magnets; and europium, gadolinium, and terbium oxides for phosphors.

        We are utilizing the assets we acquired from Chevron Mining Inc. as a foundation to build an integrated rare earth products and technology company, which requires considerable additional capital investment. We believe the application of improved technologies, along with the capital investment, will allow us to create a sustainable business by cost effectively producing high purity rare earth products. Prior to the completion of Project Phoenix Phase 1, we anticipate further diversifying our product line through the production of samarium/europium/gadolinium concentrate from bastnasite concentrate stockpiles. Upon completion of Project Phoenix Phase 1 and Project Phoenix Phase 2, we expect to produce lanthanum, cerium, praseodymium, neodymium, samarium, europium, gadolinium, terbium, dysprosium and yttrium in various chemical compounds and/or metal forms, including alloys.

35

Sales

        The following is a summary of sales by significant product and product categories, net of intercompany transactions, for the three months ended March 31, 2012 and 2011, in thousands:

	Three Months Ended March 31,
	2012		2011
Rare earth products:
Lanthanum products	$	20,838	$	11,466
Cerium products	$	2,694	$	9,053
Neodymium/Praseodymium products	$	27,963	$	4,762
Other rare earth products	$	109	$	980
Rare metals	$	13,716		—
Rare earth alloy products	$	16,728		—
Other non-rare earth products	$	2,422		—

        Our prices and product mix are determined by a combination of global and regional supply and demand factors. Our sales increased for the three months ended March 31, 2012 as compared to the three months ended March 31, 2011, due to higher sales volumes of neodymium and praseodymium products, which have significantly higher values than the lanthanum and cerium products that comprised approximately 78% of our sales in the first quarter of 2011, and an enhanced product mix. Sales of rare earth products in the first quarter of 2012 included 680 mt of REOs at an average price of $75.89 per kilogram, as compared to sales of 696 mt of REOs at an average price of $37.73 per kilogram during the corresponding period in 2011. Sales of rare metals for the three months ended March 31, 2012 consisted of 75 mt at an average price of $182.88 per kilogram. During the first quarter of 2012, we also sold 96 mt of rare earth alloys, which included 39 mt of REOs, at an average price of $174.25 per kilogram.

        The quantities we sell are determined by the production capabilities of our Molycorp Mountain Pass facility, and starting in April 2011, by the production capabilities of our Molycorp Silmet and MMA facilities and by demand for our products, which is also influenced by the level of purity and consistency we are able to achieve. Our sales also include finished products acquired as part of our purchase of our Molycorp Mountain Pass facility.

        Sales of our products are subject to seasonal decreases in the first three months of each year as companies react to the Chinese New Year holiday shutdown.

Cost of Goods Sold

        Our cost of goods sold reflects the cost allocated to the inventory we acquired as part of our purchase of the Molycorp Mountain Pass facility and, beginning in the second quarter of 2011, the cost allocated to the inventory we acquired as part of our purchases of the Molycorp Silmet and MMA facilities. In addition, our cost of goods sold includes the processing costs and the cost of certain raw materials we purchased from outside vendors, which we allocated to the products we sold at our three operating facilities. Because many of our costs are fixed, as our production increases or decreases, our average cost per metric ton produced decreases or increases, respectively. Primary production costs include direct labor and benefits, maintenance, natural gas, electricity, operating supplies, chemicals, depreciation and amortization and other plant overhead expenses. Our cost of goods sold may also reflect the write-down of inventory based on current prices for our products, which could materially affect our consolidated net results of operations.

36

        Our most significant variable costs are chemicals, raw materials for alloy production and electricity. In the future, we intend to produce more of our chemicals for our Molycorp Mountain Pass facility at an on-site plant, which we expect will reduce our variable chemical costs. We are building a combined heat and power facility, or CHP facility, which we have also referred to as a co-generation facility, to provide power to our Molycorp Mountain Pass facility. Following the start-up of the CHP facility, natural gas will substantially replace third party electricity costs and become one of the most significant variable costs at our Molycorp Mountain Pass facility.

        We expect our labor and benefits costs to increase through at least 2012 due to the addition of personnel and contractors required to implement Project Phoenix Phase 1 and Project Phoenix Phase 2. In addition to volume fluctuations, our variable costs, such as electricity, operating supplies and chemicals, are influenced by general economic conditions that are beyond our control. Other events outside our control, such as power outages, have in the past interrupted our operations and increased our total production costs, and we may experience similar events in the future.

Selling, General and Administrative Expenses

        Our selling, general and administrative expenses consist primarily of personnel and related costs, including stock-based compensation; legal, accounting and other professional fees; occupancy costs; and information technology costs. We continue to experience increased selling, general and administrative expenses as we expand our business, including our planned acquisition of Neo, and operate as a publicly traded company. These expenses include additional personnel and other costs as we construct our new facilities and pursue other business development activities to execute our "mine-to-magnets" business plan. We have also experienced additional legal, compliance and corporate governance expenses, as well as additional accounting and audit expenses, stock exchange listing fees, transfer agent and other stockholder-related fees and increased premiums for certain insurance policies, among other expenses. Additionally, we incurred significant professional fees and other expenses in connection with the business acquisitions that we completed in April 2011, and our selling, general and administrative expenses are higher as a result of those acquisitions. We also invest significant resources to improve the efficiency of our REO processing operations, the development of new applications for individual REEs and exploratory drilling. During the first quarter of 2012 and 2011, we spent $3.9 million and $1.5 million, respectively, on research and development. These costs consist primarily of salaries, outside labor, material and equipment.

Income Taxes

        We account for income taxes in accordance with Accounting Standard Codification 740, Income Taxes. This guidance requires the recognition of deferred tax assets and liabilities for the tax effect of temporary differences between the financial statement and tax basis of recorded assets and liabilities at enacted statutory tax rates. This guidance also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax assets will not be realized. The recoverability of deferred tax assets is based on both our historical and anticipated earnings levels and is reviewed each reporting period to determine if any additional valuation allowance is necessary when it is more likely than not that amounts will not be recovered. We have concluded that no valuation allowance is required as of March 31, 2012 and a 100% valuation allowance was required as of March 31, 2011.

        We are a Subchapter C corporation and, therefore, are subject to federal and state income taxes on our taxable income, whereas prior to our Corporate Reorganization, we operated entirely within limited liability companies, which were not directly liable for the payment of federal or state income taxes and our taxable income or loss was included in the state and federal tax returns of Molycorp, LLC's members. For the three months ended March 31, 2012 and 2011, we recorded an income tax benefit of $2.2 million and an income tax expense $0.2 million, respectively.

37

        The tax basis of the assets and liabilities transferred to us pursuant to the Contribution Agreement was, in the aggregate, equal to Molycorp, LLC's adjusted tax basis in the assets as of the date of the contribution. Therefore, the tax basis in the assets transferred to us is significantly higher than the book basis in the same assets, which resulted in a deferred tax asset. The majority of our deferred tax asset has been assigned to mineral resources, and the anticipated use of percentage depletion to reduce our taxable income, relative to book income, is expected to provide full realization of this asset over time.

        We review our deferred tax assets and liabilities each reporting period using the enacted tax rate expected to apply to taxable income for the period in which the deferred tax asset or liability is expected to be realized. The statutory income tax rates that are applied to our current and deferred income tax calculations are significantly impacted by the states in which we do business. Changes in state income tax rates and apportionment laws will result in changes in the calculation of our current and deferred income taxes. The effects of any changes are recorded in the period of enactment and can increase or decrease the net deferred tax assets and liabilities on the balance sheet.

Environmental

        Our operations are subject to numerous and detailed federal, state and local environmental laws, regulations and permits, including those pertaining to employee health and safety, environmental permitting and licensing, air quality standards, greenhouse gases, or GHG, emissions, water usage and pollution, waste management, plant and wildlife protection, handling and disposal of radioactive substances, remediation of soil and groundwater contamination, land use, reclamation and restoration of properties, the discharge of materials into the environment and groundwater quality and availability.

        We retain, both within Molycorp and outside Molycorp, the services of reclamation and environmental, health and safety, or EHS, professionals to review our operations and assist with environmental compliance, including with respect to product management, solid and hazardous waste management and disposal, water and air quality, asbestos abatement, drinking water quality, reclamation requirements, radiation control and other EHS issues.

        We have spent, and anticipate that we will continue to spend, financial and managerial resources to comply with environmental requirements. For example, we have acquired enough air emission offset credits for both Project Phoenix Phase 1 and Project Phoenix Phase 2. In addition, at our Molycorp Mountain Pass facility during the first quarter of 2012 and 2011, we incurred operating expenses of approximately $2.2 million and $1.0 million, respectively, associated with environmental compliance requirements.

        The costs we anticipate to incur as part of our on-going remediation, which is expected to continue throughout our Molycorp Mountain Pass facility's operating, closure and post-closure periods, are included as part of our asset retirement obligations. See Asset Retirement Obligation in the Notes to the Condensed Consolidated Financial Statements, included in this Quarterly Report on Form 10-Q.

        As part of our ongoing remediation efforts at the Molycorp Mountain Pass facility, we identified liner defects in three of the onsite evaporation ponds earlier in 2011. This led to minor groundwater contamination issues that are limited to a small area directly underneath the evaporation ponds. In order to remediate this issue, we will replace the primary lining system and might have to install a groundwater recovery system. We estimate the cost of these items to range between $2.4 million and $4.6 million, which will be treated as capital expenditures in 2012. The evaporation ponds in which the lining tears have been detected were substantially drained in 2011 to allow the repair of the lining defects, and the related costs were recorded as of December 31, 2011.

        We estimate to incur approximately $17.0 million for wastewater transportation and disposal costs in 2012, primarily for the removal and disposal of any wastewater generated in excess of the existing evaporation capability of all ponds at the Molycorp Mountain Pass facility, until all facilities currently

38

under construction as part of Project Phoenix Phase 1 and Phase 2 are operational and properly coordinated. These costs will be recognized as incurred consistently with the prior period.

        We cannot predict the impact of new or changed laws, regulations or permit requirements, including the matters discussed below, or changes in the way such laws, regulations or permit requirements are enforced, interpreted or administered. Environmental laws and regulations are complex, change frequently and have tended to become more stringent over time. It is possible that greater than anticipated environmental expenditures will be required in 2012 or in the future, including expenditures as a result of our acquisitions of MMA and Molycorp Silmet. We expect continued government and public emphasis on environmental issues will result in increased future investment for environmental controls at our operations. Additionally, with increased attention paid to emissions of GHGs, including carbon dioxide, current and future regulations are expected to affect our operations. We will continue to monitor developments in these various programs and assess their potential impacts on our operations.

        Violations of environmental laws, regulations and permits can result in substantial penalties, court orders to install pollution control equipment, civil and criminal sanctions, permit revocations, facility shutdowns and other sanctions. In addition, environmental laws and regulations may impose joint and several liability, without regard to fault, for costs relating to environmental contamination at our facilities or from wastes disposed of at third-party waste facilities. The proposed expansion of our operations is also conditioned upon securing the necessary environmental and other permits and approvals. In certain cases, as a condition to procuring such permits and approvals, we are required to comply with financial assurance requirements. The purpose of these requirements is to assure the government that sufficient company funds will be available for the ultimate closure, post-closure care and/or reclamation at our facilities. We typically obtain bonds as financial assurance for these obligations and, as of March 31, 2012, we had placed a total of $28.8 million of surety bonds with California state and regional agencies. These bonds require annual payment and renewal. In the second quarter of each year, we are required to provide the State of California with an updated estimate of the costs associated with the mine reclamation. This estimate is reviewed and approved by the State of California, after which we are responsible for making any necessary changes to surety bonds placed with the State of California.

        As a result of new construction activity at the Molycorp Mountain Pass facility associated with our modernization and expansion project, additional lands have been disturbed since the last mine reclamation cost estimate in 2010, resulting in an increase in the mine reclamation obligation from $3.3 million to $4.1 million. The additional $0.8 million surety amount was placed with the County of San Bernardino and the State of California during the quarter. The EPA has announced its intention to establish a new financial assurance program for hardrock mining, extraction and processing facilities under the Federal Comprehensive Environmental Response Compensation and Liability Act or the "Superfund" law, which may require us to establish additional bonds or other sureties. We cannot predict the effect of any such requirements on our operations at this time.

39

Results of Operations

Three Months Ended March 31, 2012 and 2011

	Three Months Ended March 31
(In thousands)	2012			2011			Change
Sales	$	84,470		$	26,261		$	58,209
Cost of goods sold		(53,443	)		(16,677	)		(36,766	)
Selling, general and administrative expenses		(31,214	)		(11,238	)		(19,976	)
Depreciation and amortization expense		(107	)		(83	)		(24	)
Accretion expense		(251	)		(234	)		(17	)
Operating loss		(545	)		(1,971	)		1,426
Other (expense) income:
Other income (expense)		(6,578	)		(168	)		(6,410	)
Foreign currency transaction losses, net		1,604			—			1,604
Interest (expense) income, net		85			140			(55	)
Loss before income taxes and equity earnings		(5,434	)		(1,999	)		(3,435	)
Income tax expense		2,183			(199	)		2,382
Equity in results of affiliates		(227	)		—			(227	)
Net loss	$	(3,478	)	$	(2,198	)	$	(1,280	)

Segment Information

Three Months Ended March 31, 2012 (In thousands)	Molycorp Mountain Pass			Molycorp Silmet			MMA			Other			Eliminations			Total Molycorp, Inc.
Sales:
External	$	44,478		$	21,036		$	18,956		$	—		$	—		$	84,470
Intersegment		1,832			3,210			—						(5,042	)		—
Total sales		46,310			24,246			18,956
Cost of goods sold		(18,846	)		(34,774	)		(18,632	)		—			18,809			(53,443	)
Selling, general and administrative expenses		(29,079	)		(1,714	)		(457	)		(273	)		309			(31,214	)
Depreciation, amortization and accretion expense		(334	)		—			—			(24	)		—			(358	)
Operating (loss) income		(1,949	)		(12,242	)		(133	)		(297	)		14,076			(545	)
Other (expense) income		(6,444	)		1,579			(4	)		(20	)		—			(4,889	)
Loss before income taxes and equity earnings	$	(8,393	)	$	(10,663	)	$	(137	)	$	(317	)	$	14,076		$	(5,434	)
Total assets at March 31, 2012	$	1,675,653		$	100,499		$	24,313		$	630		$	(112,342	)	$	1,688,753
Capital expenditures (accrual basis excluding capitalized interest)	$	259,438		$	2,501		$	100		$	—		$	—		$	262,039

40

Molycorp Mountain Pass was the only operating segment for the three months ended March 31, 2011. Therefore, no comparative segment information is provided in the first quarter of 2012.

Sales

        For the three months ended March 31, 2012 and 2011, our consolidated sales were $84.5 million and $26.3 million, respectively. The increase in sales is due to higher sales of metal and alloy products as a result of our acquisitions of MMA and Molycorp Silmet in April 2011, and higher sales volumes of neodymium and praseodymium products, which have much higher sale prices per kilogram than the lanthanum and cerium products that comprised a greater percentage of our sales in the first quarter of 2011.

        The following analysis presents sales and cost of goods sold on a gross basis (i.e., before intercompany eliminations). Management believes this presentation provides a better understanding of the performance of each operating segment in terms of production volumes and costs.

Molycorp Mountain Pass

        Molycorp Mountain Pass' sales were $46.3 million and $26.3 million for the three months ended March 31, 2012 and 2011, respectively. Sales in the first quarter of 2012 included neodymium and praseodymium products, which have relatively higher sales prices per kilogram compared to products sold in the first quarter of 2011, which primarily consisted of lanthanum and cerium products. In total, for the three months ended March 31, 2012, Molycorp Mountain Pass sold 673 mt of products on a REOs equivalent basis at an average sales price of $68.81 per kilogram compared to sales of 696 mt of products on the same basis at an average sales price of $37.73 per kilogram for the corresponding period in 2011. We anticipate cerium, lanthanum, neodymium and praseodymium products to make up a significant percentage of our total sales until we complete Project Phoenix Phase 1. The following is a summary of sales at Molycorp Mountain Pass by product for the three months ended March 31, 2012 and 2011, in thousands.

	Three Months Ended March 31,
Molycorp Mountain Pass	2012		2011
Lanthanum products	$	20,614	$	11,466
Cerium products	$	2,007	$	9,053
Neodymium/Praseodymium products	$	23,580	$	4,762
Other rare earth products	$	109	$	980

        Other rare earth products include yttrium, misch metal, erbium, and other heavy rare earth products.

Molycorp Silmet

        Sales from our Molycorp Silmet facility for the three months ended March 31, 2012 were $24.2 million. Molycorp Silmet sold 277 mt of REOs equivalent products at an average sales price of approximately $35.58 per kilogram, and 75 mt of rare metals at an average sales price of approximately

41

$182.88 per kilogram. The following is a summary of sales by product at Molycorp Silmet for the three months ended March 31, 2012, in thousands.

Molycorp Silmet	Three Months Ended March 31, 2012
Rare earth products:
Lanthanum products	$	1,493
Cerium products	$	2,911
Neodymium/Praseodymium products	$	5,453
Rare metals:
Tantalum	$	7,180
Niobium	$	6,536
Other products	$	673

        Other products include rare earth fluorides, samarium, europium, gadolinium and nitric fertilizer.

MMA

        For the three months ended March 31, 2012, MMA sold rare earth alloys, custom and specialty alloys, high purity rare earth metals, and resale of other non-REOs material totaling approximately 168 mt, which contained an equivalent of 39 mt of REOs, for a total of $19.0 million. As part of the acquisition of MMA, we entered into a rare earth products purchase and supply agreement with Santoku Corporation, or Santoku, through which MMA will supply Santoku with certain rare earth alloys for a two-year period at prices equal to the feedstock cost plus the applicable product premium as such terms are defined in the purchase and supply agreement. Sales to Santoku under the terms of this agreement were $16.6 million in the first quarter of 2012, and comprised 88% of total MMA sales. The following is a summary of sales by product at MMA for the three months ended March 31, 2012, in thousands.

MMA	Three Months Ended March 31, 2012
Rare earth alloys:
Neodymium alloys	$	15,730
Samarium alloys	$	998
Other products	$	2,228

        Other products include specialty alloys, small metals, metal foils and the resale of certain other materials.

Cost of Goods Sold

Molycorp Mountain Pass

        Molycorp Mountain Pass' cost of goods sold was $18.8 million and $16.7 million for the three months ended March 31, 2012 and 2011, respectively. The higher costs in the first quarter of 2012, as compared to the first quarter in 2011, were primarily due to increased production costs. In addition, we recognized a zero and $1.3 million write-down of work in process inventory based on estimated REO quantities, and a $0.3 million and $0.6 million write-down due to production costs in excess of net realizable value for the three months ended March 31, 2012 and 2011, respectively. The weighted average cost of goods sold on a REO basis at Molycorp Mountain Pass was approximately $28.00 per kilogram in the first quarter of 2012 as compared to approximately $23.96 per kilogram in first quarter of 2011.

42

        Total production costs charged to inventory were $15.4 million and $7.9 million for the three months ended March 31, 2012 and 2011, respectively. Inventory purchases and tolling costs were $3.3 million and $6.0 million in the first quarter of 2012 and 2011, respectively. The primary products we purchased during those periods were lanthanum oxide, cerium oxide, cerium carbonate, neodymium oxide, didymium metal and praseodymium oxide.

        The following is a summary of rare earth products produced at the Molycorp Mountain Pass facility for the three months ended March 31, 2012 and 2011, in metric tons.

	Three Months Ended March 31,
Molycorp Mountain Pass	2012		2011
Lanthanum products		251		261
Cerium products		284		170
Neodymium/Praseodymium products		80		68

        Production costs charged to inventory were higher during the first quarter of 2012 as compared to the corresponding period in 2011 due to a larger labor workforce, higher chemical, and domestic and hazard waste disposal costs. We expensed $3.0 million and $2.6 million in the first quarter of 2012 and 2011, respectively, of production-related costs that would have otherwise been charged to inventory if we maintained normal production levels during these periods. We expect to attain increased production levels throughout 2012.

        Chemical costs allocated to production were $3.8 million and $2.3 million for the three months ended March 31, 2012 and 2011, respectively. Chemical costs in the first quarter of 2012 were higher as compared to the first quarter of 2011 due to a general increase in prices for chemicals.

        Labor costs, including related employee benefits, allocated to production were $5.8 million and $2.7 million for the three months ended March 31, 2012 and 2011, respectively. As of March 31, 2012, we had a total of 352 employees at the Molycorp Mountain Pass facility and our corporate office (which together comprise our Molycorp Mountain Pass segment), as compared to 165 employees as of March 31, 2011, which led to higher wage and employee-related benefit expenses. Higher labor costs were also due to the annual wage increase required under our union contract, which took effect in January 2012.

        Maintenance costs, including maintenance labor and supplies, were $1.9 million and $0.7 million in the first quarter of 2012 and 2011, respectively. Utility charges, which primarily include electricity, were $0.9 million and $0.8 million for the three months ended March 31, 2012 and 2011, respectively.

        Other costs allocated to production, including depreciation, were $6.4 million and $4.7 million for the three months ended March 31, 2012 and 2011, respectively. These costs were higher in the first quarter of 2012 due to the significant increase in waste disposal costs. Additional increases are due to higher consulting and contracted service costs during the first quarter of 2012 as compared to the same period in 2011.

Molycorp Silmet

        Cost of goods sold at Molycorp Silmet reflects costs that are incurred to acquire raw materials and processing costs incurred to obtain finished goods. Processing costs primarily include labor, materials and chemicals, energy and depreciation. In addition, we recognized $13.0 million write-down due to production costs in excess of net realizable value for the three months ended March 31, 2012. Molycorp Silmet's cost of goods sold for the three months ended March 31, 2012 was $34.8 million, with a weighted average cost of goods sold on a REOs basis of approximately $38.00 per kilogram. The

43

weighted average cost of goods sold per kilogram excludes costs recognized for the write-down due to production costs in excess of net realizable value.

        The following table provides volumes of rare earth products, rare metals and other products Molycorp Silmet produced during the first quarter of 2012, in metric tons.

Molycorp Silmet	Three Months Ended March 31, 2012
Rare earth products:
Lanthanum products		126
Cerium products		190
Neodymium/Praseodymium products		87
Other products		7
Rare metals:
Tantalum		40
Niobium		130
Other products		170

        Labor, chemicals and energy costs that Molycorp Silmet allocated to production of rare earth products, rare metal and other products for the three months ended March 31, 2012 were $0.5 million, $0.5 million, and $0.6 million, respectively. Other costs allocated to all production, including depreciation, were $1.2 million for the same period.

MMA

        Cost of goods sold at MMA reflects costs that are incurred to acquire raw materials and processing costs incurred to obtain finished goods. Processing costs primarily include labor, materials, energy and depreciation. MMA's cost of goods sold for the first quarter of 2012 was $18.6 million, with a weighted average cost of goods sold of approximately $110.00 per kilogram. In addition, we recognized $0.2 million write-down due to production costs in excess net realizable value for the three months ended March 31, 2012. The weighted average cost of goods sold per kilogram excludes costs recognized for the write-down due to production costs in excess of net realizable value.

        The following table provides volumes of rare earth alloys, and other products MMA produced for the three months ended March 31, 2012, in metric tons.

MMA	Three Months Ended March 31, 2012
Rare earth alloys:
Neodymium alloys		84
Samarium alloys		25
Other products		9

        The total MMA production of 118 mt in the period included approximately 44 mt of REOs equivalent products. Other products include specialty alloys, small metals, metal foils and the resale of other non-REO-based materials.

        MMA costs allocated to production were $16.0 million, which include labor, materials, energy costs and depreciation for the three months ended March 31, 2012.

44

Selling, General and Administrative Expenses

Molycorp Mountain Pass

        Selling, general and administrative expenses at Molycorp Mountain Pass, including stock-based compensation, were $29.1 million and $11.2 million for three months ended March 31, 2012 and 2011, respectively. Beginning in the first quarter of 2011, we experienced a significant increase in professional fees associated with the construction of our new facilities and other business development activities to execute our "mine-to-magnets" business plan. Total start-up costs for the three months ended March 31, 2012 and 2011 were $8.9 million and zero, respectively. We have also experienced increased spending for accounting, legal, information technology consulting and engineering services. Selling, general and administrative expenses include $3.9 million and $1.5 million of research and development costs, which include exploratory drilling, in the first quarter of 2012 and 2011, respectively.

Molycorp Silmet

        Selling, general and administrative expenses at Molycorp Silmet were $1.7 million in the first quarter of 2012. Our selling, general and administrative expenses at Molycorp Silmet consist primarily of personnel and related costs, such as legal, accounting and other professional fees, occupancy costs and information technology costs.

MMA

        Selling, general and administrative expenses at MMA were $0.5 million in the first quarter of 2012. Our selling, general and administrative expenses at MMA consist primarily of personnel and related costs, such as legal, accounting and other professional fees, occupancy costs and information technology costs.

Capital Expenditures

        Our consolidated capital expenditures, on an accrual basis and excluding capitalized interest, totaled $262.0 million and $41.3 million for the three months ended March 31, 2012 and 2011, respectively. The majority of these capitalized costs relate to Project Phoenix Phase 1 and Project Phoenix Phase 2 at our Molycorp Mountain Pass facility.

Related Party Transactions

        We made principal payments of $0.9 million for each the three month periods ended March 31, 2012 and 2011 under the inventory financing arrangement with Traxys North America LLC, which we refer to as Traxys and affiliates, the parent of one of our stockholders, TNA Moly Group, LLC.

        We and Traxys and affiliates jointly market and sell certain lanthanum oxide, cerium oxide, misch metal and erbium oxide products. Per the terms of this other arrangement, we and Traxys and affiliates split gross margin equally once all costs associated with the sale are recovered by both parties. In the first quarter of 2012, we made a payment of $104,000 to Traxys and affiliates under this other arrangement.

        Our Molycorp Silmet facility had a balance receivable from Traxys and affiliates of $0.4 million as of March 31, 2012, which related to sales of tantalum metal to Traxys and affiliates of $3.2 million in 2011.

Foreign currency transaction gains

        Net foreign currency transaction gains were $1.6 million during the three months ended March 31, 2012. These gains primarily relate to U.S. dollar monetary balances owed by Molycorp Silmet revalued

45

as a result of the change in the exchange rate between the functional currency of Molycorp Silmet, the Euro,and the U.S. dollar, as of March 31, 2012. During the three months ended March 31, 2012, the Euro appreciation against the U.S. dollar was approximately 3%.

Outlook for the Remainder of 2012

        We anticipate China-based producers and suppliers will continue to limit the quantity of REOs available outside of China for the remainder of 2012, despite the challenge to the Chinese export policy by some of the members of the World Trade Organization in early 2012. While we anticipate the demand for our product to remain soft during the second quarter of 2012, we believe a recovery in demand will begin in the third quarter of 2012, although there can be no assurance of such recovery. We also anticipate prices for most of our products to remain stable or experience some slight and temporary declines for the remainder of 2012. Additionally, the volume of products we are able to produce will remain limited by the capability of our existing production facilities until the completion of the construction of Project Phoenix Phase 1 by the end of the third quarter of 2012, which, coupled with the anticipated soft demand for our products during the second quarter of 2012 and the potential for declining prices, could adversely impact our second quarter results of operations. We do, however, anticipate progressively expanding our products and markets through the remainder of 2012, including market penetrations of our XSORBX® technology into the water treatment industry. We will continue to supply Molycorp Silmet and MMA with rare earth feedstocks from our Molycorp Mountain Pass facility to utilize their production capabilities. We believe that our consolidated sales in 2012 will be sufficient to fund our operating activities throughout the year, including consolidated selling, general and administrative expenses. We expect our REOs production in 2012 to be between 8,000 mt and 10,000 mt. Additionally, we expect to produce between 315 mt and 325 mt of rare metals at our Molycorp Silmet facility in 2012.

Capital Investments

        We are incurring significant capital expenditures under our plans to modernize and expand our Molycorp Mountain Pass facility, as well as consistent expenditures to replace assets necessary to sustain safe and reliable production. Most of the facilities and equipment acquired in connection with the acquisition of the Molycorp Mountain Pass facility are at least 20 years old. We are executing an accelerated modernization plan that includes the refurbishment of the Molycorp Mountain Pass mine and related processing facilities through 2012 in order to increase our REOs production. We anticipate our 2012 production to be between 8,000 and 10,000 mt of REOs. We accelerated Project Phoenix Phase 1 start-up due to robust rare earth oxide markets and favorable project economics. This acceleration, if successful, will help to improve the diversity of global supply, which is an increasingly urgent matter for rare earth consumers. By accelerating Project Phoenix Phase 1 start-up, we also expect to reduce the overall project risk by allowing for a more orderly and sequential start-up of the various circuits of this complex plant. Our capital expenditures for the engineering, procurement and construction, or EPC, portion of Project Phoenix Phase 1 and Project Phoenix Phase 2 currently are expected to total approximately $895.0 million. Capital expenditures for other capital projects related to operations at Molycorp Mountain Pass are expected to total approximately $105.0 million. These estimates do not include certain other capitalizable costs such as insurance, permitting, contracting and other legal costs, which totaled approximately $10.0 million through March 31, 2012, and capitalized interest. We are also incurring other administrative expenses related to the construction of Project Phoenix Phase 1 and Project Phoenix Phase 2, which are expected to total approximately $16.0 million to $19.0 million in the second through fourth quarters of 2012.

        All of the amounts for future capital spending described above are initial estimates that are subject to change as the projects are further developed. Total capital spending for our Molycorp Mountain Pass facility, plant and modernization project, including the other capital projects, is expected to be

46

approximately $336.0 million for the remainder of 2012. We are encountering cost pressures on our projects and have initiated measures to mitigate certain adverse cost trends. While we are continuing to re-evaluate the impact on the budget, we will incur additional costs, which may be significant if our mitigation measures are not successful.

        We expect to incur capital expenditures of $20.0 million to $24.0 million at our Molycorp Silmet facility for the remainder of 2012 for the renovation of the premises, the upgrade of laboratory and production equipment, the extension of the warehouse, as well as the improvement of the information technology system.

        At our MMA facility, we expect to incur capital expenditures of $11.0 million to $15.0 million to increase our alloy production capacity by 2,000 metric tons per year with the addition of one new strip casting furnace, and to expand NdFeB alloy production. A portion of this capital expenditure will be incurred later in 2012 with the remainder during the first quarter of 2013.

Liquidity and Capital Resources

        We expect to fund the cash portion of the proposed Neo acquisition, including related fees and expenses, of approximately $1.3 billion with a combination of proceeds from the planned issuance of long-term debt and cash on hand of the combined companies, including the $390.1 million of proceeds from the Molymet equity placement we received in March 2012.

        We expect to finance the remaining capital expenditures under Project Phoenix Phase 1 and Project Phoenix Phase 2 and other capital expenditures, related to operations at Molycorp Mountain Pass, as well as working capital and other funding requirements, with our available cash balances, excluding the equity placement from Molymet, of $219.7 million as of March 31, 2012, anticipated cash flow from operations, and other financing arrangements, which may include a portion of the proceeds from our planned issuance of long-term debt, vendor financing, and lease arrangements.

Cash Provided from Operating Activities

        Net cash provided from operations during the three months ended March 31, 2012 was $16.0 million, an increase of $10.8 million as compared to the same period in 2011. This change was primarily driven by higher sales, partially offset by a net increase in working capital requirements.

Investing Activities

        Net cash used in investing activities increased to $210.8 million in the first quarter of 2012 as compared to $27.8 million in the first quarter of 2011. This increase was due primarily to higher capital expenditures as part our modernization and expansion plan at Molycorp Mountain Pass, and our first contribution to IMJ.

Financing Activities

        Net cash provided from financing activities increased from $198.7 million in the first quarter of 2011 to $385.6 million during the three months ended March 31, 2012, primarily due to the Molymet's $390.2 million investment in us, partially offset by the $2.8 million preferred dividend that we paid on March 1, 2012, and $1.6 million of debt repayments.

Liquidity of Operating Subsidiaries

        Our total $609.8 million of cash and cash equivalents as of March 31, 2012 is comprised of 1) $592.9 million held by Molycorp Minerals, LLC, of which $203.0 million represents liquidity available at the corporate level to fund the remaining capital expenditures under Project Phoenix Phase 1 and Project Phoenix Phase 2 as well as the working capital needs at Molycorp Mountain Pass,

47

with the remainder to be used for the planned acquisition of Neo; 2) $37,404 held by Molycorp Silmet; 3) $16.7 million held by MMA; and 4) $0.2 million held by the sales office in Tokyo, Japan. In addition to cash and cash equivalents, the primary sources of liquidity of our operating subsidiaries are cash provided by operations and, in the case of Molycorp Silmet, borrowing under certain bank loans. From time to time, the sources of liquidity for Molycorp Silmet and MMA may be supplemented by short-term loans from Molycorp Minerals, LLC.

        As of March 31, 2012, Molycorp Minerals, LLC advanced funds, in the form of interest bearing unsecured promissory notes, to Molycorp Silmet for $17.4 million and to MMA for $37.2 million, including accrued interest. Principal repayments under these notes are due to Molycorp Minerals, LLC during the second and third quarter of 2012. Our operating subsidiaries' liquidity generally is used to fund their working capital requirements, capital expenditures and third-party debt service requirements.

Contractual Obligations

        As of March 31, 2012, we had the following contractual obligations, in thousands:

	Payments Due by Period
Contractual Obligations	Total		Less Than 1 Year		1 - 3 Years		4 - 5 Years		More Than 5 Years
	(In thousands)
Operating lease obligations(1)	$	3,666	$	1,509	$	1,702	$	455	$	—
Purchase obligations and other commitments(2)		388,799		388,745		53		—		—
Employee obligations(3)		799		745		54		—		—
Asset retirement obligations(4)		32,425		346		6,919		568		24,592
Debt, excluding interest		236,581		1,383		4,296		230,902		—
Total	$	662,270	$	392,728	$	13,024	$	231,925	$	24,592

(1)

Represents all operating lease payments for office space, land and office equipment.

(2)

Represents contractual commitments for the purchase of materials and services from vendors. Amount includes $2.4 million of potential environmental obligations related to defects in pond liners.

(3)

Represents primarily payments due to employees for awards under our annual incentive plan.

(4)

Under applicable environmental laws and regulations, we are subject to reclamation and remediation obligations resulting from our operations. The amounts presented above represent our estimated future undiscounted cash flows required to satisfy the obligations currently known to us.

        On September 30, 2010, we entered into a natural gas transportation lease agreement with Kern River Gas Transmission Company, or Kern River, under which we agreed, subject to certain conditions, to make payments totaling $5.2 million per year ($0.43 million per month) for 10 years beginning in April 2012 to Kern River in exchange for the designing, permitting, constructing, operating, and maintaining of facilities necessary to provide natural gas to the power generation facility to be constructed at our Molycorp Mountain Pass facility. However, the contractual obligation table above does not include any obligations under this natural gas transportation lease agreement with Kern River as the lease agreement is subject to certain conditions not yet met as of March 31, 2012.

Off-Balance Sheet Arrangements

        As of March 31, 2012, our only off-balance sheet arrangements are the operating leases and purchase obligations included in the contractual obligations table above.

48

Recent Accounting Pronouncements

        In June 2011, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2011-05: Presentation of Comprehensive Income. In this update, an entity has the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both options, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. Regardless of whether an entity chooses to present comprehensive income in a single continuous statement or in two separate but consecutive statements, the entity is required to present on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statement(s) where the components of net income and the components of other comprehensive income are presented. The amendments in this update do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. The amendments do not change the option for an entity to present components of other comprehensive income either net of related tax effects or before related tax effects, with one amount shown for the aggregate income tax expense or benefit related to the total of other comprehensive income items. In both cases, the tax effect for each component must be disclosed in the notes to the financial statements or presented in the statement in which other comprehensive income is presented. The amendments do not affect how earnings per share is calculated or presented. For public entities, the amendments, which should be applied retrospectively, are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. Early adoption is permitted.

        We early adopted this update and elected, in the second quarter of 2011, to present comprehensive income in two separate, but consecutive statements. No retroactive application of this update was necessary as we did not have any items entering into the determination of comprehensive income (loss) other than net income (loss) for all periods prior to the second quarter of 2011.

        In September 2011, the FASB issued ASU 2011-08, Testing Goodwill for Impairment. Under this updated guidance, an entity will have the option to first assess qualitatively whether it is necessary to perform the current two-step goodwill impairment test. If an entity believes, as a result of its qualitative assessment, that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is required. Otherwise, no further testing is necessary. The update does not change how an entity performs the two-step impairment test under the current guidance. This ASU is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted. We do not expect the adoption of this updated guidance to have a significant impact on our financial statements.

        In December 2011, the FASB issued ASU 2011-12, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in ASU 2011-05. ASU 2011-12 defers the requirement that companies present reclassification adjustments for each component of Accumulated Other Comprehensive Income, or AOCI, in both net income and other comprehensive income on the face of the financial statements. Companies will continue to be required to present amounts reclassified out of AOCI on the face of the financial statements or disclose those amounts in the notes to the financial statements. During the deferral period, there is no requirement to separately present or disclose the reclassification adjustments into net income.

        For the period ended March 31, 2012, we did not have any reclassification adjustments for components of AOCI.

49

GLOSSARY OF SELECTED MINING TERMS

        The following is a glossary of selected mining terms used in this quarterly report on Form 10-Q that may be technical in nature:

Assay	The analysis of the proportions of metals in ore, or the testing of an ore or mineral for composition, purity, weight, or other properties of commercial interest.
Bastnasite	Bastnasite is a mixed-lanthanide fluoro-carbonate mineral (Ln F CO3) that currently provides the bulk of the world's supply of the light REEs. Bastnasite and monazite are the two most common sources of cerium and other REEs. Bastnasite is found in carbonatites, igneous carbonate rocks that melt at unusually low temperatures.
Cerium	Cerium (Ce) is a soft, silvery, ductile metal which easily oxidizes in air. Cerium is the most abundant of the REEs, and is found in a number of minerals, including monazite and bastnasite. Cerium has two relatively stable oxidation states, enabling both the storage of oxygen and its widespread use in catalytic converters. Cerium is also widely used in glass polish.
Concentrate	A mineral processing product that generally describes the material that is produced after crushing and grinding ore, effecting significant separation of gangue (waste) minerals from the desired metal and/or metal minerals, and discarding the waste minerals. The resulting "concentrate" of minerals typically has an order of magnitude higher content of minerals than the beginning ore material.
Cut-off grade	The lowest grade of mineralized material that qualifies as ore in a given deposit. The grade above which minerals are considered economically mineable considering the following parameters: estimates over the relevant period of mining costs, ore treatment costs, general and administrative costs, refining costs, royalty expenses, by-product credits, process and refining recovery rates and price.
Didymium	Didymium is a natural and unseparated combination of neodymium and praseodymium, which is approximately 75% neodymium and 25% praseodymium, depending on the ore.
Dysprosium	A few percent of Dysprosium (Dy) is often added to high power neodymium iron boron magnets to increase their resistance to demagnetization. A minor use of dysprosium is in the magnetostrictive alloy, based on DyTbFe called terfenol-D.
Europium	Europium (Eu) is desirable due to its photon emission. Excitation of the europium atom, by absorption of electrons or by UV radiation, results in changes in energy levels that create a visible emission. Almost all practical uses of europium utilize this luminescent behavior.

50

Gadolinium	Gadolinium (Gd) absorbs neutrons and therefore is used for shielding and controlling neutron radiography and in nuclear reactors. Because of its paramagnetic properties, solutions of organic gadolinium complexes and gadolinium compounds are popular intravenous contrast enhancing agents for medical Magnetic Resonance Imaging contrast agents in (MRI). Gadolinium is sometimes added to samarium cobalt magnets to make their magnetic properties less temperature dependent.
Grade	The average REE content, as determined by assay of a metric ton of ore.
Lanthanum	Lanthanum (La) is the first member of the Lanthanide series. Lanthanum is a strategically important rare earth element due to its use in fluid bed cracking catalysts, FCCs, which are used in the production of transportation and aircraft fuel. Lanthanum is also used in fuel cells and batteries.
Mill	A processing plant that produces a concentrate of the valuable minerals contained in an ore.
Mineralization	The process or processes by which a mineral or minerals are introduced into a rock, resulting in a valuable or potentially valuable deposit.
Monazite	Monazite is a reddish-brown phosphate mineral. Monazite minerals are typically accompanied by concentrations of uranium and thorium. This has historically limited the processing of monazite, however this mineral is becoming more attractive because it typically has elevated concentrations of mid-to heavy rare earths.
Niobium	Niobium is a rare, soft, grey, ductile transition metal found in the minerals pyrochlore, the main commercial source for niobium, and columbite. Niobium is used mostly in alloys, the largest part in special steel such as that used in gas pipelines. Although alloys contain only a maximum of 0.1%, that small percentage of niobium improves the strength of the steel. The temperature stability of niobium-containing superalloys is important for its use in jet and rocket engines. Niobium is used in various superconducting materials.
Neodymium	Neodymium (Nd) has two major uses. It is key constituent of NdFeB permanent magnets and it is an additive to capacitor dielectrics. NdFeB magnets maximize the power/weight ratio, and are found in a large variety of motors, generators, sensors and hard disk drives. Capacitors containing neodymium are found in cellular telephones, computers and nearly all other electronic devices. A minor application of neodymium is in lasers.
Ore	That part of a mineral deposit which could be economically and legally extracted or produced at the time of reserve determination.
Overburden	In surface mining, overburden is the material that overlays an ore deposit. Overburden is removed prior to mining.

51

Praseodymium	Praseodymium (Pr) comprises about 4% of the lanthanide content of bastnasite and has a few specific applications, based mainly on its optical properties. It is a common coloring pigment, and is used in photographic filters, airport signal lenses, and welder's glasses. Because it chemically and magnetically is so similar to its neighbors neodymium and lanthanum, it is typically found in small amounts in applications where neodymium and lanthanum are popular, such as NdFeB magnets and catalysts. These latter applications are actually the largest uses for praseodymium because the magnet and catalyst markets are so large. Thus praseodymium plays an important role, in extending the availability of the more popular neodymium and lanthanum.
Probable reserves	Reserves for which quantity and grade and/or quality are computed from information similar to that used for proven reserves, but the sites for inspection, sampling, and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven reserves, is high enough to assume continuity between points of observation.
Proven reserves	Reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or quality are computed from the results of detailed sampling; and (b) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well established.
Recovery	The percentage of contained metal actually extracted from ore in the course of processing such ore.
Reserves	That part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination. Same definition as 'ore'
Samarium	Samarium (Sm) is predominantly used to produce samarium cobalt magnets. Although these magnets are slightly less powerful than NdFeB magnets at room temperature, samarium cobalt magnets can be used over a wider range of temperatures and are less susceptible to corrosion.
Tantalum	Tantalum is a rare, hard, blue-gray, lustrous transition metal that is highly corrosion resistant. It is part of the refractory metals group, which are widely used as minor component in alloys. The chemical inertness of tantalum makes it a valuable substance for laboratory equipment and a substitute for platinum, but its main use today is in tantalum capacitors in electronic equipment such as mobile phones, DVD players, video game systems and computers.
Terbium	Terbium (Tb) is used primarily as a phosphor, either in fluorescent lamps or x-ray screens. It can replace dysprosium in NdFeB magnets but usually does not because of its cost. A minor use of terbium is in the magnetostrictive alloy, based on DyTbFe called terfenol-D.
Yttrium	Yttrium (Y), although not a lanthanide series element, is often considered to be a rare earth element and its behavior is similar to heavy rare earth elements. It is predominantly utilized in lighting applications and ceramics. Other uses include resonators, lasers, microwave communication devices and other electronic devices.

52

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

        Our operations may be impacted by commodity prices, geographic concentration, changes in interest rates and foreign currency exchange rates.

Commodity Price Risk

        Our current principal product mix, including cerium, lanthanum, praseodymium, neodymium, tantalum and niobium are commodities but are not traded on any commodity exchange. As such, direct hedging of the prices for future production cannot be undertaken. A portion of our current business is conducted in the spot market; therefore, prices can vary with the transaction and individual bids received. Our products are primarily marketed to manufacturers as component materials. Prices will vary based on the demand for the end products being produced with the mineral resources we mine and process.

        Our sales and profitability are determined principally by the price of the rare earth products, rare metals and magnet alloys that we produce and, to a lesser extent by the price of natural gas and other supplies used in the production process. The prices of our rare earth products are influenced by the price and demand of the end products that our products support, including clean energy technologies. A significant decrease in the global demand for these products may have a material adverse effect on our business. We currently have no hedging contracts for revenues and costs in place and intend to consider hedging strategies in the future.

        Our costs and capital investments are subject to market movements in other commodities such as natural gas and chemicals. We may enter into derivative contracts for a portion of the expected usage of these products, but we do not currently have any derivative contracts on these commodities and we do not currently anticipate entering into derivative agreements on commodities.

Interest Rate Risk

        Our total debt obligations, including our inventory financing arrangement with Traxys North America LLC, were $236.6 million at March 31, 2012. Our exposure to interest rate risk as a result of the variable interest debt included in these obligations would result in a roughly $0.1 million increase/decrease in interest rate expense for every 100 basis point increase/decrease in the underlying interest rate. We are not significantly impacted by variations in interest rates at this time. Our exposure to interest rate risk would increase if, for example, we obtain and utilize additional debt facilities in the future.

Foreign Currency Risk

        We are exposed to fluctuations of the U.S. dollar (our reporting currency) against the functional currency (the Euro) of Molycorp Silmet, our operating subsidiary in Estonia, when we translate Molycorp Silmet's financial statements into U.S. dollars for inclusion in our consolidated financial statements. Cumulative translation adjustments are recorded in accumulated other comprehensive income (loss) as a separate component of equity. Any increase (decrease) in the value of the U.S. dollar against the Euro results into unrealized foreign currency translation losses (gains) with respect to assets acquired in, liabilities assumed from, intercompany balances with and results of operations from Molycorp Silmet. Therefore, we may experience a negative impact on our comprehensive income (loss) and stockholders' equity with respect to our holdings in Molycorp Silmet as a result of foreign currency translation. We generally do not hedge against the risk that we may incur non-cash losses upon the translation of the financial statements of our Estonian subsidiary into U.S. dollars.

53

        We are exposed to fluctuations in foreign currency exchange rates relative to a small portion of our purchases of equipment and have entered into foreign currency forward contracts to hedge against such foreign currency risk.

        We are also exposed to fluctuations of the U.S dollar against the Japanese Yen as it pertains to our investment in IMJ. We will contribute, upon achievement of certain milestones and subject to our Board of Directors' approval, Japanese Yen, or JPY, 2.5 billion in cash, or approximately $30.4 million based on the JPY/ U.S. dollar exchange rate as of March 31, 2012, in exchange of ordinary shares of the joint venture over a period of twelve months starting in January 2012. The actual remittance amounts will vary depending on the future exchange rate between the U.S. dollar and the Japanese Yen, and the achievement of certain milestones by the joint venture.

        We are exposed to the fluctuation of the U.S. dollar against the Canadian dollar relative to the cash portion of the purchase consideration we have estimated for our planned acquisition of Neo Material Technologies Inc. in the second or third quarter of 2012. As a result, we have entered into a contingent forward contract to purchase $870.0 million Canadian dollars to manage the foreign currency exposure with respect to this planned acquisition.

ITEM 4.    CONTROLS AND PROCEDURES.

Evaluation of disclosure controls and procedures

        In accordance with Rule 13a-15(b) of the Securities Exchange Act of 1934, or the Exchange Act, the Company's management, with the participation of the Chief Executive Officer and the Chief Financial Officer, carried out an evaluation of the effectiveness of the Company's "disclosure controls and procedures", as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, as of the end of the period covered by this report. Based on its evaluation, the Company's management, including the Chief Executive Officer and the Chief Financial Officer, have concluded that the Company's disclosure controls and procedures are effective as of March 31, 2012, so to provide reasonable assurance that material information required to be disclosed in reports the Company files or submits under the Exchange Act is made known to them timely.

Changes in internal control over financial reporting

        There have been no changes in the Company's internal control over financial reporting that occurred during the quarter ended March 31, 2012 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS.

        From time to time, we may become subject to various legal proceedings that are incidental to the ordinary conduct of our business.

        In February 2012, a purported class action lawsuit captioned, Angelo Albano, Individually and on Behalf of All Others Similarly Situated v. Molycorp, Inc., et al., was filed against us and certain of our executive officers in the U.S. District Court for the District of Colorado. This federal court action alleges, among other things, that we and those officers violated Section 10(b) of the Securities Exchange Act of 1934 in connection with statements relating to our third quarter fiscal 2011 financial results and fourth quarter 2011 production guidance that we had filed with or furnished to the SEC, or otherwise made available to the public. The plaintiffs are seeking unspecified damages and other relief. We believe the allegations are without merit and that we have valid defenses to such allegations. We intend to defend this action vigorously. We are unable to provide meaningful quantification of how the

54

final resolution of these claims may impact our future consolidated financial position or results of operations.

        Seven stockholder derivative lawsuits have been filed in three different jurisdictions purportedly on behalf of Molycorp, Inc., against certain of its directors, certain of its officers, and certain of its private equity investors. These cases have been filed in the Delaware Chancery Court, the U.S. District Court in Colorado, and the District Court in Arapahoe County, Colorado. They are captioned: Gaines v. Smith et al., Case No. 7282 (Del. Ch. Feb. 12, 2012); Paskowitz v. Smith et al., Case No. 7319 (Del. Ch. Mar. 9, 2012); Wilson v. Smith et al., No. 7395-VCN (Del. Ch. April 4, 2012); Wells v. Smith et al., No. 1:12-cv-00447-WJM (D. Colo. Feb. 21, 2012); Swaggerty v. Smith et al., No. 12-cv-00589-CMA-KLM (D. Colo. Mar. 7, 2012); Clem v. Smith et al., No. 12 CV 392 (Arapahoe Cnty., Colo. Feb. 24, 2012); and Nationwide Consulting, Inc. v. Smith et al., No. 12 CV 448 (Arapahoe Cnty., Colo. Mar. 5, 2012). The Clem and Nationwide cases have since been consolidated under the caption Clem v. Smith et al., No. 12 CV 392 (Arapahoe Cnty., Colo.).

        The derivative complaints challenge among other things certain sales of stock by officers, directors and private equity firms, and certain Molycorp corporate acquisitions during 2011. The complaints assert causes of action for: (1) alleged breaches of fiduciary duty, including the duties of loyalty and due care; (2) alleged unjust enrichment; (3) alleged waste of corporate assets; and (4) alleged "abuse of control." On behalf of Molycorp, the plaintiffs in the derivative actions seek, among other things, monetary damages, restitution, an accounting, and certain changes to corporate governance procedures.

        The Defendants have filed a motion in each case seeking to consolidate the derivative actions in one jurisdiction, and have expressed a preference for the Delaware Court of Chancery.

        The Defendants deny allegations in the derivative complaints and will vigorously contest the claims in each lawsuit.

ITEM 1A.    RISK FACTORS.

        There were no material changes to the risk factors disclosed in Item 1A of Part I in our Annual Report on Form 10-K for the year ended December 31, 2011, as filed with the SEC on February 28, 2012.

ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

        None.

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES.

        None.

ITEM 4.    MINE SAFETY DISCLOSURES.

        The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in exhibit 95.1 to this Quarterly Report on Form 10-Q.

ITEM 5.    OTHER INFORMATION.

        None.

55

ITEM 6.    EXHIBITS

Exhibit Number		Description
	2.1	Arrangement Agreement, dated March 8, 2012, by and among Molycorp, Inc., 0934634 B.C. Ltd. and Neo Material Technologies Inc. (incorporated by reference to Exhibit 2.1 to Molycorp Inc.'s Current Report on Form 8-K (File No. 001-34827) filed with the Securities and Exchange Commission on March 14, 2012)*
	3.1	Amended and Restated Certificate of Incorporation of Molycorp, Inc., dated as of August 3, 2010 (incorporated by reference to Exhibit 3.1 to Molycorp, Inc.'s Current Report on Form 8-K (File No. 001- 34827) filed with the Securities and Exchange Commission on August 6, 2010
	3.2	Bylaws of Molycorp, Inc., amended as of August 3, 2010 (incorporated by reference to Exhibit 3.2 to Molycorp, Inc.'s Current Report on Form 8-K (File No. 001-34827) filed with the Securities and Exchange Commission on August 6, 2010
	10.1	Securities Purchase Agreement, dated January 31, 2012, by and between Molycorp, Inc. and Molibdenos y Metales S.A.
	10.2	Summary of Molycorp, Inc. 2012 Annual Incentive Plan (incorporated by reference to Exhibit 10.1 to Molycorp, Inc.'s Current Report on Form 8-K (File No. 001-34827) filed with the Securities and Exchange Commission on March 5, 2012)
	10.3	Form of Performance-Based Restricted Stock Units Agreement (incorporated by reference to Exhibit 10.2 to Molycorp, Inc.'s Current Report on Form 8-K (File No. 001-34827) filed with the Securities and Exchange Commission on March 5, 2012)
	10.4	Amended and Restated Executive Employment Agreement, dated February 28, 2012, by and between Molycorp, Inc. and Mark A. Smith (incorporated by reference to Exhibit 10.3 to Molycorp, Inc.'s Current Report on Form 8-K (File No. 001-34827) filed with the Securities and Exchange Commission on March 5, 2012)
	10.5	Amended and Restated Executive Employment Agreement, dated February 28, 2012, by and between Molycorp, Inc. and James S. Allen (incorporated by reference to Exhibit 10.4 to Molycorp, Inc.'s Current Report on Form 8-K (File No. 001-34827) filed with the Securities and Exchange Commission on March 5, 2012)
	10.6	Amended and Restated Executive Employment Agreement, dated February 28, 2012, by and between Molycorp, Inc. and John F. Ashburn, Jr. (incorporated by reference to Exhibit 10.1 to Molycorp, Inc's Current Report on Form 8-K (File No. 001-34827) filed with the Securities and Exchange Commission on March 5, 2012)
	10.7	Amended and Restated Executive Employment Agreement, dated February 28, 2012, by and between Molycorp, Inc. and John Burba (incorporated by reference to Exhibit 10.1 to Molycorp, Inc.'s Current Report on Form 8-K (File No. 001-34827) filed with the Securities and Exchange Commission on March 5, 2012)
	10.8	Amended and Restated Executive Employment Agreement, dated February 28, 2012, by and between Molycorp, Inc. and Douglas J. Jackson
	10.9	Amended and Restated Executive Employment Agreement, dated February 28, 2012, by and between Molycorp, Inc. and John K. Bassett
	23.1	Consent of SRK Consulting (U.S.), Inc.

56

Exhibit Number		Description
	31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	32.1	Certification pursuant to U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	95.1	Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
	101.INS	XBRL Instance Document
	101.SCH	XBRL Taxonomy Extension Schema Document
	101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
	101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
	101.LAB	XBRL Taxonomy Extension Label Linkbase Document
	101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

*

Certain of the exhibits and schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K and will be provided to the Securities and Exchange Commission upon request.

57

SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	MOLYCORP, INC.
May 10, 2012	By:	/s/ MARK A. SMITH President and Chief Executive Officer (Principal Executive Officer)
May 10, 2012	By:	/s/ JAMES S. ALLEN James S. Allen Chief Financial Officer and Treasurer (Principal Financial Officer)

58

EXHIBIT INDEX

Exhibit Number		Description
	2.1	Arrangement Agreement, dated March 8, 2012, by and among Molycorp, Inc., 0934634 B.C. Ltd. and Neo Material Technologies Inc. (incorporated by reference to Exhibit 2.1 to Molycorp Inc.'s Current Report on Form 8-K (File No. 001-34827) filed with the Securities and Exchange Commission on March 14, 2012)*
	3.1	Amended and Restated Certificate of Incorporation of Molycorp, Inc., dated as of August 3, 2010 (incorporated by reference to Exhibit 3.1 to Molycorp, Inc.'s Current Report on Form 8-K (File No. 001- 34827) filed with the Securities and Exchange Commission on August 6, 2010
	3.2	Bylaws of Molycorp, Inc., amended as of August 3, 2010 (incorporated by reference to Exhibit 3.2 to Molycorp, Inc.'s Current Report on Form 8-K (File No. 001-34827) filed with the Securities and Exchange Commission on August 6, 2010
	10.1	Securities Purchase Agreement, dated January 31, 2012, by and between Molycorp, Inc. and Molibdenos y Metales S.A.
	10.2	Summary of Molycorp, Inc. 2012 Annual Incentive Plan (incorporated by reference to Exhibit 10.1 to Molycorp, Inc.'s Current Report on Form 8-K (File No. 001-34827) filed with the Securities and Exchange Commission on March 5, 2012)
	10.3	Form of Performance-Based Restricted Stock Units Agreement (incorporated by reference to Exhibit 10.2 to Molycorp, Inc.'s Current Report on Form 8-K (File No. 001-34827) filed with the Securities and Exchange Commission on March 5, 2012)
	10.4	Amended and Restated Executive Employment Agreement, dated February 28, 2012, by and between Molycorp, Inc. and Mark A. Smith (incorporated by reference to Exhibit 10.3 to Molycorp, Inc.'s Current Report on Form 8-K (File No. 001-34827) filed with the Securities and Exchange Commission on March 5, 2012)
	10.5	Amended and Restated Executive Employment Agreement, dated February 28, 2012, by and between Molycorp, Inc. and James S. Allen (incorporated by reference to Exhibit 10.4 to Molycorp, Inc.'s Current Report on Form 8-K (File No. 001-34827) filed with the Securities and Exchange Commission on March 5, 2012)
	10.6	Amended and Restated Executive Employment Agreement, dated February 28, 2012, by and between Molycorp, Inc. and John F. Ashburn, Jr. (incorporated by reference to Exhibit 10.1 to Molycorp, Inc's Current Report on Form 8-K (File No. 001-34827) filed with the Securities and Exchange Commission on March 5, 2012)
	10.7	Amended and Restated Executive Employment Agreement, dated February 28, 2012, by and between Molycorp, Inc. and John Burba (incorporated by reference to Exhibit 10.1 to Molycorp, Inc.'s Current Report on Form 8-K (File No. 001-34827) filed with the Securities and Exchange Commission on March 5, 2012)
	10.8	Amended and Restated Executive Employment Agreement, dated February 28, 2012, by and between Molycorp, Inc. and Douglas J. Jackson
	10.9	Amended and Restated Executive Employment Agreement, dated February 28, 2012, by and between Molycorp, Inc. and John K. Bassett
	23.1	Consent of SRK Consulting (U.S.), Inc.
	31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit Number		Description
	31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	32.1	Certification pursuant to U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	95.1	Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
	101.INS	XBRL Instance Document
	101.SCH	XBRL Taxonomy Extension Schema Document
	101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
	101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
	101.LAB	XBRL Taxonomy Extension Label Linkbase Document
	101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

*

Certain of the exhibits and schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K and will be provided to the Securities and Exchange Commission upon request.

EX-10.1

Exhibit 10.1

Execution Version

SECURITIES PURCHASE AGREEMENT

by and between

MOLYCORP, INC.

and

MOLIBDENOS Y METALES S.A.

Dated as of January 31, 2012

SECURITIES PURCHASE AGREEMENT

THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of January 31, 2012, is entered into by and between Molycorp, Inc., a Delaware corporation (the “Company”), and Molibdenos y Metales S.A., a company established under the laws of Chile (the “Purchaser”).

BACKGROUND

A.            Pursuant to the terms of that certain Memorandum of Understanding, dated as of July 19, 2011 (the “MOU”), by and between the Company and the Purchaser, and following the satisfactory completion of the Purchaser’s due diligence review as contemplated thereby, the Purchaser desires to make an investment in the Company.

B.            Consequently, the Company desires to sell to the Purchaser, and the Purchaser desires to purchase from the Company, 12,500,000 newly issued shares (the “Investment Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”), all on the terms and subject to the conditions set forth in this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

ARTICLE I:  DEFINED TERMS

1.1          Defined Terms.

When used in this Agreement, the following terms will have the meanings assigned to them below:

“Affiliate” means with respect to any Person, a Person that directly or indirectly controls, is controlled by, or is under common control with, any such Person.  The term “control” (including the terms “controlled by” or “under common control with”) means, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through ownership of voting securities, membership interests, by contract or otherwise.

“Agreement” has the meaning set forth in the Preamble.

“Annual Report” means the Company’s Annual Report on Form 10-K for the year ended December 31, 2010, as filed with the SEC.

“Applicable Market Value” means $28.38 per share, which is the average VWAP for the 20 consecutive Trading Days ending on the Trading Day immediately preceding the date of this Agreement.

“Beneficial Ownership” and “Beneficially Own” and derivations thereof are defined in accordance with the term “beneficial ownership” as defined in Rule 13d-3 under the Exchange Act.

“Board” has the meaning set forth in Section 3.1(a)(iii).

“Business Day” means any day other than a Saturday, Sunday or other day in the City of New York, New York, USA, on which banking institutions are authorized by Law to close.

“Bylaws” has the meaning set forth in Section 3.1(a)(iii).

“Certificate of Incorporation” has the meaning set forth in Section 3.1(a)(i).

“CFIUS” has the meaning set forth in Section 6.2(a).

“Claim” means any action, charge, suit, claim, complaint, cause of action, written demand or notice of violation, investigation or proceeding before or by any Governmental Entity or arbitrator.

“Closing” has the meaning set forth in Section 2.3.

“Closing Date” has the meaning set forth in Section 2.3.

“Common Stock” has the meaning set forth in the Background Paragraphs.

“Common Stock Equivalents” means any securities of the Company or its subsidiaries that entitle the holder thereof to acquire at any time Common Stock, including any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

“Company” has the meaning set forth in the Preamble.

“Consent” means any consent, approval, authorization, order, qualification, filing, clearance (including any negative clearance), waiver or registration.

“End Date” has the meaning set forth in Section 9.1(b).

“Exchange Act” means the United States Securities Exchange Act of 1934, as amended.

“FINSA” means Section 721 of the Defense Production Act of 1959 (50 U.S.C. App. 2170), as amended by The Foreign Investment and National Security Act of 2007, (P.L. 110-49, 121 Stat. 246), and implementing Regulations Pertaining to Mergers, Acquisitions and Takeovers by Foreign Persons (31 C.F.R. Part 800).

“GAAP” means United States generally accepted accounting principles.

“General Enforceability Exceptions” has the meaning set forth in Section 4.2(a).

“Governmental Entity” means any domestic or foreign federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, or any court or tribunal.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.

“ICC” has the meaning set forth in Section 10.8.

“Indemnification Agreement” means the Indemnification Agreement by and between the Company and the Purchaser Director, in substantially the same form as the indemnification agreements entered into between the Company and each of its current directors.

“Investment Shares” has the meaning set forth in the Background Paragraphs.

2

“Law” means any law, common law, statute, code, ordinance, regulation or other requirement of any Governmental Entity.

“Lien” means any security interest, pledge, lien, bailment (in the nature of a pledge or for purposes of security), mortgage, deed of trust, grant of a power to confess judgment, conditional sale or title retention agreement (including any lease in the nature thereof), charge, claim, encumbrance, easement, reservation, restriction, right of first refusal or first offer or option.

“Losses” has the meaning set forth in Section 7.4(e)(i).

“Material Adverse Effect” means any event, change, effect, circumstance, condition, development or occurrence, individually or in the aggregate, causing, resulting in or having a material adverse effect on (a) the financial condition, business, assets, properties, results of operations or prospects of the Company and its subsidiaries, taken as a whole, or (b) the legality, validity or enforceability of this Agreement or on the Company’s ability to perform any of its material obligations hereunder; provided, that Material Adverse Effect shall not include any event, change, effect, circumstance, condition, development or occurrence resulting from:  (i) any changes in general United States or global political, economic or market conditions, unless such changes have a materially disproportionate adverse effect on the Company and its subsidiaries, taken as a whole, as compared to a majority of the other similarly situated companies operating in the same industry; (ii) any changes in conditions generally affecting the industry in which the Company operates, unless such changes have a materially disproportionate adverse effect on the Company and its subsidiaries, taken as a whole, as compared to a majority of the other similarly situated companies operating in such industry; (iii) any changes in Law or applicable accounting regulations or principles or the interpretations thereof; (iv) acts of terrorism, war (whether or not declared) or civil unrest, or escalations thereof, or natural disasters, unless such acts or disasters have a materially disproportionate adverse effect on the Company and its subsidiaries, taken as a whole, as compared to a majority of the other similarly situated companies operating in the same industry; (v) any announcement of the transactions contemplated by this Agreement; (vi) a party’s compliance with the terms of, or taking any action contemplated by, this Agreement; (vii) any changes in the price or trading volume of the Common Stock (provided that any event, change, effect, circumstance, condition, development or occurrence that may have caused such changes will not be excluded under this proviso); or (viii) any failure, in and of itself, by the Company to meet any internal or published projections, forecasts, estimates or predictions in respect of revenues, earnings or other financial or operating metrics for any period (provided that any event, change, effect, circumstance, condition, development or occurrence that may have caused such failure will not be excluded under this proviso).

“Material Permits” has the meaning set forth in Section 4.9.

“Material Subsidiaries” has the meaning set forth Section 4.1(b).

“MOU” has the meaning set forth in the Background Paragraphs.

“Mountain Pass Facility” means the rare earth mining and processing operations, facilities and other infrastructure and related assets located in Mountain Pass, California and owned by the Company’s Material Subsidiary, Molycorp Minerals, LLC, a Delaware limited liability company.

“Nomination Requirements” has the meaning set forth in Section 7.3(b).

“Nondisclosure Agreement” has the meaning set forth in Section 6.1.

3

“Order” means any judgment, writ, decree, injunction, order, compliance agreement or settlement agreement of or with any Governmental Entity or arbitrator.

“Percentage Limitation” has the meaning set forth in Section 7.2(a).

“Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or a Governmental Entity (or any department, agency or political subdivision thereof).

“Post-Closing Standstill Period” means the period of time commencing on the Closing Date and ending on the two-year anniversary of the Closing Date.

“Pre-Closing Standstill Period” means the period of time commencing on the date of this Agreement and ending (a) immediately prior to the Closing or (b) upon a valid termination of this Agreement pursuant to Article IX, whichever occurs first.

“Premium” means ten percent (10%).

“Project Phoenix Phase 1” has the meaning set forth in Section 4.9.

“Project Phoenix Phase 2” has the meaning set forth in Section 4.9.

“Prospectus” means the prospectus included in a Registration Statement (including a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A, Rule 430B or Rule 430C promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Investment Shares covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.

“Purchase Price” means the aggregate amount equal to (a) the number of Investment Shares, multiplied by (b) (i) the Applicable Market Value, multiplied by (ii) the Premium.  The Purchase Price equals $390,225,000.00 (or $31.218 per Investment Share).

“Purchaser” has the meaning set forth in the Preamble.

“Purchaser Director” has the meaning set forth in Section 7.3(b).

“Registration Statement” means a registration statement that meets the requirements set forth in Section 7.4 and covers the resale by the Purchaser of all or a portion of the Investment Shares.

“SEC” means the United States Securities and Exchange Commission or any successor agency thereto.

“SEC Reports” means the Annual Report and all other reports filed or furnished by the Company with the SEC under Sections 13(a), 13(c) or 15(d) under the Exchange Act on or after December 31, 2010.

“Securities” has the meaning set forth in Section 7.2(a).

“Securities Act” means the United States Securities Act of 1933, as amended.

4

“Trading Day” means a full trading day (beginning at 9:30 a.m. Eastern Time and ending at 4:00 p.m. Eastern Time) on the Trading Market.

“Trading Market” means the New York Stock Exchange or any successors thereto.

“Transfer” means, (a) when used as a verb, to sell, transfer, assign, encumber, pledge, hypothecate, grant any right, option, profit participation or other interest in, or otherwise dispose of, directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, or make an offer to do any of the foregoing, and (b) when used as a noun, a direct or indirect, voluntary or involuntary, sale, transfer, assignment, encumbrance, pledge, hypothecation, grant of any right, option, profit participation or other interest, or other disposition by operation of law or otherwise, and any offer to do any of the foregoing.

“VWAP” means the daily volume weighted average price (based on a Trading Day from 9:30 a.m. to 4:00 p.m. (Eastern Time) of one share of the Common Stock on the Trading Market as reported by Bloomberg Financial L.P.

ARTICLE II:  ISSUANCE AND SALE OF THE INVESTMENT SHARES

2.1          Authorization of Issuance and Sale.

Subject to the terms and conditions of this Agreement, the Company has authorized the issuance and sale of the Investment Shares to the Purchaser.

2.2          Agreement to Sell and Purchase.

At the Closing, the Company will issue and sell to the Purchaser, and the Purchaser will purchase from the Company, the Investment Shares at the Purchase Price, upon the terms and subject to the conditions set forth in this Agreement.

2.3          The Closing of the Sale.

The closing of the transactions contemplated by this Agreement (the “Closing”) will take place on the second Business Day following the day upon which the last of the conditions set forth in Article VIII (other than those that by their terms are to be satisfied or waived at the Closing itself) is satisfied or waived in writing at a location mutually selected by the Purchaser and the Company at 10:00 a.m. Eastern Time (the “Closing Date”), or at such other time as may be agreed upon by the Purchaser and the Company.  The Company and the Purchaser may also conduct the Closing remotely through the electronic exchange of Closing documentation.  At the Closing, on the terms and subject to the conditions contained herein, the Company will issue, sell and deliver to the Purchaser, and the Purchaser will purchase from the Company, the Investment Shares free and clear of any Liens, other than any restrictions imposed by applicable securities Laws and this Agreement.

2.4          Book-Entry Registration of Shares.

At the Closing, the Company will issue the Investment Shares to the Purchaser by registering them in the Purchaser’s name in book-entry form with the Company’s transfer agent.

2.5          Exemption from Registration.

The Investment Shares being purchased hereunder by the Purchaser (a) have not been registered under the Securities Act or any applicable state and other securities Laws, and will be issued under one or

5

more exemptions from registration under the Securities Act and any applicable state and other securities Laws, and (b) will be “restricted securities” (as that term is defined in Rule 144(a)(3) promulgated under the Securities Act) and may not be resold unless they are registered under the Securities Act and any applicable state and other securities Laws or an exemption from registration is available.  Accordingly, the restrictions noted in the records of the Company’s transfer agent and any certificates evidencing the Investment Shares being purchased hereunder by the Purchaser will, upon issuance, contain legends in substantially the following form (in addition to any other legends required to be placed thereon under applicable state securities Laws):

THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, OR PURSUANT TO ANY STATE SECURITIES LAWS  OR THE LAWS OF ANY OTHER JURISDICTION, AND MAY NOT BE SOLD, TRANSFERRED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT OR SUCH LAWS AND THE RULES AND REGULATIONS THEREUNDER.  THE SECURITIES REPRESENTED BY THIS INSTRUMENT ARE FURTHER SUBJECT TO TRANSFER AND OTHER RESTRICTIONS SET FORTH IN A SECURITIES PURCHASE AGREEMENT, DATED AS OF JANUARY 31, 2012, COPIES OF WHICH ARE ON FILE WITH THE SECRETARY OF THE COMPANY AT THE COMPANY’S PRINCIPAL EXECUTIVE OFFICES.

ARTICLE III:  THE CLOSING

3.1          Deliveries at the Closing.

(a)       At the Closing, the Company will deliver, or cause to be delivered, to the Purchaser:

(i)            a copy of the Amended and Restated Certificate of Incorporation of the Company (the “Certificate of Incorporation”) certified as of a recent date by the Secretary of State of the State of Delaware;

(ii)           a certificate issued as of a recent date by the Secretary of State of the State of Delaware certifying that the Company is in good standing in the State of Delaware;

(iii)          a certificate of an executive officer of the Company, dated as of the Closing Date, certifying (A) that a true, complete and correct copy of the Certificate of Incorporation, as in effect on the Closing Date, is attached to such certificate; (B) that a true, complete and correct copy of the Bylaws of the Company (the “Bylaws”), as in effect on the Closing Date, are attached to such certificate; (C) that true, complete and correct copies of resolutions of the Board of Directors of the Company (the “Board”) (1) authorizing the execution and delivery of this Agreement and the performance by the Company of its obligations hereunder, including the issuance of the Investment Shares, (2) appointing the Purchaser Director to serve as a Class II director effective as of the Closing Date, and (3) approving the nomination of the Purchaser Director as a Class II director candidate for election at the next annual meeting of the Company’s stockholders, are attached to such certificate; and (D) as to the matters set forth in Sections 8.3(a) and 8.3(b);

(iv)          a receipt duly executed by the Company evidencing receipt by the Company of the Purchase Price (as may be reduced as provided in Section 2.1) in cash;

(v)           the Indemnification Agreement duly executed by the Company; and

6

(vi)          such other documents relating to the transactions contemplated hereby as the Purchaser may reasonably request.

(b)      At the Closing, the Purchaser will deliver, or cause to be delivered, to the Company:

(i)            the Purchase Price (as may be reduced as provided in Section 2.1) in cash, by bank wire transfer of immediately available funds to an account designated in writing by the Company;

(ii)           a certificate of an executive officer of the Purchaser, dated as of the Closing Date, certifying as to the matters set forth in Sections 8.2(a) and 8.2(b);

(iii)          the Indemnification Agreement duly executed by the Purchaser Director; and

(iv)          such other documents relating to the transactions contemplated hereby as the Company may reasonably request.

ARTICLE IV:  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

As a material inducement to the Purchaser to enter into and perform its obligations under this Agreement, the Company represents and warrants to the Purchaser, as of the date hereof and as of the Closing Date, as follows:

4.1          Organization and Qualification.

(a)           The Company has been duly incorporated, is validly existing as a corporation in good standing under the laws of the State of Delaware, has the corporate power and authority to own its property and to conduct its business as described in the SEC Reports, and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business as currently conducted or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not reasonably be expected to have a Material Adverse Effect.

(b)           The only material subsidiaries of the Company are:  (i) Molycorp Minerals, LLC, a Delaware limited liability company; (ii) Molycorp Metals & Alloys, Inc., an Illinois corporation; and (iii) Aktsiaselts Molycorp Silmet, a public limited company organized under the laws of the Republic of Estonia (collectively, the “Material Subsidiaries”).  All of the issued shares of capital stock or other equity interests of each Material Subsidiary held by the Company have been duly and validly authorized and issued, are fully paid and non-assessable and are owned directly or indirectly by the Company, free and clear of all Liens except those Liens imposed by applicable securities Laws and those Liens imposed by the transaction documents pursuant to which the Material Subsidiaries were acquired or formed, as applicable.

(c)           Each Material Subsidiary of the Company has been duly organized, is validly existing and in good standing (to the extent such concept is recognized) under the laws of the jurisdiction of its organization, has the power and authority to own its property and to conduct its business as described in the SEC Reports and is duly qualified to transact business and is in good standing (to the extent such concept is recognized) in each jurisdiction in which the conduct of its business as currently conducted or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not reasonably be expected to have a Material Adverse Effect.

7

4.2          Power; Authorization; Validity and Enforceability.

(a)           The Company has the corporate power and authority to execute, deliver and perform its obligations under this Agreement.  This Agreement has been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery by the Purchaser, represents the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as enforceability may be limited by any applicable bankruptcy, reorganization, insolvency or other laws affecting creditors’ rights generally or by general principles of equity (the “General Enforceability Exceptions”).

(b)           The Investment Shares have been duly authorized and, when issued and delivered in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable.

4.3          Non-Contravention; Consents.

The execution and delivery by the Company of, and the performance by the Company of its obligations under, this Agreement will not contravene any provision of:  (a) applicable Law; (b) the Certificate of Incorporation or Bylaws; (c) any agreement or other instrument binding upon the Company or any of its subsidiaries that is material to the Company and its subsidiaries, taken as a whole; or (d) any Order.  No Consent of any Governmental Entity is required for the performance by the Company of its obligations under this Agreement, except for the Consents contemplated by Section 6.2(a) and as may be required by the state securities or “blue sky” Laws and any filings required under the Securities Act or the Exchange Act.

4.4          Capitalization of the Company.

Immediately prior to the date of this Agreement, the authorized capital stock of the Company consisted of 350,000,000 shares of Common Stock, of which 83,895,354 shares are issued and outstanding, and 5,000,000 shares of preferred stock, par value $0.001 per share, of which 2,070,000 shares of convertible preferred stock are issued and outstanding.  As of the date of this Agreement, the Company has not, and as of the Closing, the Company will not have, issued any capital stock since its most recently filed periodic report under the Exchange Act, other than (a) pursuant to any equity compensation or stock purchase plan that has been approved by the Company’s Board of Directors and stockholders, (b) pursuant to the conversion or exercise of Common Stock Equivalents, (c) in connection with bona fide business acquisitions by the Company or any of its subsidiaries, whether by merger, consolidation, sale of assets, sale or exchange of stock or otherwise, each as approved by the Company’s Board of Directors, and (d) in connection with bona fide commercial relationships of the Company or its subsidiaries, as long as any such issuance is not primarily intended to provide the Company with equity financing.  No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by this Agreement.  As of the date of this Agreement, except as set forth in the SEC Reports or as otherwise disclosed to the Purchaser in writing immediately prior to its execution of this Agreement, there are no outstanding options, warrants, script rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents.  The issuance and sale of the Investment Shares will not obligate the Company to issue shares of Common Stock or other securities of the Company to any Person (other than the Purchaser) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities.  All of the outstanding shares of capital stock of the Company are validly issued, fully paid and nonassessable, have

8

been issued in compliance in all material respects with all federal and state securities Laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities.  No further approval or authorization of any stockholder or the Board is required for the issuance and sale of the Investment Shares.  There are no stockholders agreements or voting agreements with respect to the Company’s capital stock to which the Company is a party.

4.5          SEC Reports; Financial Statements; Listing Compliance.

(a)           The Company has filed or furnished, as applicable, on a timely basis, all forms, filings, registrations, submissions, statements, certifications, reports and documents required to be filed or furnished by it with the SEC under the Exchange Act since December 31, 2010.  As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations of the SEC promulgated thereunder, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(b)           Except as set forth in the SEC Reports, the consolidated financial statements (including, in each case, any notes thereto) contained in the Company’s SEC Reports (i) were prepared in accordance with GAAP applied on a consistent basis throughout the periods indicated (except as may be indicated in the notes thereto or, in the case of interim consolidated financial statements, where information and footnotes contained in such financial statements are not required under the rules of the SEC to be in compliance with GAAP), and (ii) complied as to form, as of their respective filing dates, in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto.  Except as set forth in the SEC Reports, such consolidated financial statements fairly present, in all material respects, the financial condition of the Company and its consolidated subsidiaries at the dates of such statements and the results of their operations for the periods covered thereby (subject, in the case of unaudited statements, to normal year-end adjustments that were not and that are not expected to be, individually or in the aggregate, material to the Company and its consolidated subsidiaries taken as a whole).

(c)           The Company and each of its consolidated subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements by the Company in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

(d)           Except as set forth in the SEC Reports, since the end of the Company’s most recent audited fiscal year, (i) the Company is not aware of any material weakness in the Company’s internal control over financial reporting (whether or not remediated) and (ii) no change in the Company’s internal control over financial reporting has occurred that has materially and adversely affected, or is reasonably likely to materially and adversely affect, the Company’s internal control over financial reporting.  The Company is not subject to any significant deficiencies or material weaknesses with applicable provisions of the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations promulgated thereunder.

(e)           As of the date of this Agreement, the Company is eligible to register the Investment Shares for resale by the Purchaser on a Registration Statement on Form S-3 under the Securities Act.  There are no outstanding or unresolved comments in comment letters received from the SEC’s staff with

9

respect to the SEC Reports.  The Company does not have pending before the SEC any request for confidential treatment of information.

(f)            The Company is in compliance in all material respects with the requirements of the Trading Market for continued listing of the Common Stock thereon.  The Company has taken no action designed to terminate, or likely to have the effect of terminating, the registration of the Common Stock under the Exchange Act or the listing of the Common Stock on the Trading Market, nor has the Company received any notification that the SEC or the Trading Market is contemplating terminating such registration or listing.  The transactions contemplated by this Agreement will not contravene the rules and regulations of the Trading Market.  The Company will comply with all requirements of the Trading Market with respect to the issuance of the Investment Shares.

4.6          Absence of Certain Changes.

Since the date of the Company’s most recent audited financial statements:

(a)           there has been no event, occurrence or development that has had or that would reasonably be expected to result in a Material Adverse Effect;

(b)           the Company has not incurred any liabilities of any nature, whether accrued, absolute, fixed, contingent or otherwise, whether due or to become due and whether or not required to be recorded or reflected on a balance sheet under GAAP, other than (i) such liabilities (A) disclosed, reflected or reserved against in the financial statements of the Company included in the SEC Reports filed and available prior to the date hereof (including any notes thereto) or otherwise disclosed in writing to the Purchaser immediately prior to its execution of this Agreement or (B) incurred in the ordinary course of business consistent with past practice since December 31, 2010, which, in the case of clause (B), individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect, (ii) such liabilities arising or resulting from an existing contract, or a contract entered into in compliance with this Agreement, except to the extent that such liabilities arose or resulted from a breach or a default of such contract, or (iii) such liabilities which have been discharged or paid in full in the ordinary course of business as of the date of this Agreement;

(c)           the Company has not altered its method of accounting;

(d)           except as disclosed in its SEC Reports and for regular dividends on the Company’s outstanding preferred stock, the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock; and

(e)           the Company has not issued any equity securities to any officer, director or Affiliate or any other Person, except pursuant to its equity compensation or stock purchase plans.

4.7          Offering Exemption.

Assuming the accuracy of the representations of the Purchaser in Article V, (a) the offering, sale and issuance of the Investment Shares will be exempt from registration under the Securities Act, and (b) neither the Company nor any of its Affiliates has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Investment Shares to be integrated with prior offerings by the Company for purposes of the Securities Act or any applicable shareholder approval provisions of any Trading Market on which any of the securities of the Company are listed or designated that would cause the exemption from registration

10

under the Securities Act to be unavailable or would cause the issuance of the Investment Shares to violate the stockholder approval rules of any Trading Market.  Neither the Company nor any person acting on behalf of the Company has offered or sold any of the Investment Shares by any form of general solicitation or general advertising.  The Company has offered the Investment Shares for sale only to the Purchaser as an “accredited investor” within the meaning of Rule 501 under the Securities Act.

4.8          Brokers.

No investment banker, broker or finder who or which has acted on behalf, or under the authority of, the Company will be entitled to any fee or commission directly or indirectly from the Company in connection with any of the transactions contemplated hereby.

4.9          Regulatory Permits.

To the extent required to be disclosed in the SEC Reports, the Company and the Material Subsidiaries possess all material certificates, authorizations, licenses and permits issued by the appropriate Governmental Entities necessary to conduct their respective businesses as described in the SEC Reports (collectively, “Material Permits”), and the Company believes it can obtain, without undue burden or delay, all remaining permits necessary to complete the initial modernization and expansion plan (described as “Project Phoenix Phase 1” in the SEC Reports) and the second-phase capacity expansion plan (described as “Project Phoenix Phase 2” in the SEC Reports) for the Mountain Pass Facility.  Neither the Company nor any Material Subsidiary is in default of, or has received any notice of proceedings relating to the suspension, revocation or modification of, any Material Permit as it relates to Project Phoenix Phase 1 or Project Phoenix Phase 2 that would reasonably be expected to have a Material Adverse Effect.

4.10        Transactions with Affiliates and Employees.

Except as set forth in the SEC Reports, none of the officers, directors or employees of the Company is presently a party to any transaction with the Company or any of its subsidiaries (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any such officer, director or employee or, to the knowledge of the Company, any entity in which any such officer, director, or employee has a substantial interest or is an officer, director, trustee or partner of, other than (i) for payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) for other employee benefits, including stock option agreements under any equity compensation or stock purchase plan of the Company.

4.11        Foreign Corrupt Practices Act.

The Company has not, and since the date of its acquisition by the Company, no subsidiary in which the Company owns a majority of the outstanding equity has (a) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (b) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (c) failed to disclose fully any contribution made by the Company (or, to the knowledge of the Company, made by any Person acting on its behalf) which is in violation of law, or (d) violated any provision of the Foreign Corrupt Practices Act of 1977, as amended.

11

4.12        Manipulation of Price.

The Company has not (a) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Investment Shares, (b) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Investment Shares, or (c) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company.

ARTICLE V:  REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

As a material inducement to the Company to enter into and perform its obligations under this Agreement, the Purchaser represents and warrants to the Company, as of the date hereof and as of the Closing Date, as follows:

5.1          Organization and Qualification.

The Purchaser is a company duly organized, validly existing and in good standing under the laws of Chile and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business as currently conducted or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not reasonably be expected to adversely affect the Purchaser’s ability to perform its obligations under this Agreement.  The Purchaser has the necessary power and authority to (a) own, operate and lease its properties and assets as and where currently owned, operated and leased and (b) carry on its business as currently conducted.

5.2          Power; Authorization; Validity and Enforceability.

The Purchaser has all requisite power and authority to execute, deliver and perform its obligations under this Agreement.  This Agreement has been duly authorized, executed and delivered by the Purchaser and, assuming due authorization, execution and delivery by the Company, represents the legal, valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, subject to the General Enforceability Exceptions.

5.3          Non-Contravention; Consents.

The execution and delivery by the Purchaser of, and the performance by the Purchaser of its obligations under, this Agreement will not contravene any provision of:  (a) applicable Law; (b) the governing documents of the Purchaser; (c) any agreement or other instrument binding upon the Purchaser or any of its subsidiaries that is material to the Purchaser and its subsidiaries, taken as a whole; or (d) any Order.  No Consent of any Governmental Entity is required for the performance by the Purchaser of its obligations under this Agreement, except for the Consents contemplated by Section 6.2(a).

5.4          Investment Representations.

(a)           The Purchaser:  (i) is an “accredited investor” as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act, has such knowledge and experience in financial and business matters (either alone or in conjunction with a financial advisor) that it is capable of evaluating the merits and risks of the investment in the Investment Shares, and has the capacity to protect its own interests; (ii) believes that the nature and amount of the Investment Shares being purchased is consistent with the Purchaser’s overall investment program and financial position; (iii) recognizes that there are

12

substantial risks involved in the acquisition of the Investment Shares, including risk of loss of the entire amount of such investment, and that there is no assurance that any economic, income or tax benefit will be realized from such investment; and (iv) understands that it must be able to bear the economic risk of an investment in the Investment Shares for an indefinite period of time (A) because the Investment Shares will be “restricted securities” (as that term is defined in Rule 144(a)(3) promulgated under the Securities Act) and, therefore, must be held indefinitely unless subsequently registered under the Securities Act and applicable state and other securities Laws or unless an exemption from such registration is available, and (B) as a result of the restrictions set forth in Sections 7.1 and 7.2.

(b)           The Purchaser is acquiring the Investment Shares for investment purposes for its own account, not as a nominee or agent, and not with the view to, or for resale in connection with, any distribution of any part thereof.  The Purchaser understands that the Investment Shares have not been registered under the Securities Act or applicable state and other securities Laws by reason of a specific exemption from the registration provisions of the Securities Act and applicable state and other securities Laws, the availability of which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Purchaser’s representations as expressed herein.

(c)           The Purchaser is familiar with the Company and has been afforded access to all information regarding the business, operations, assets, condition (financial and otherwise), operating results, liabilities and prospects of the Company and its subsidiaries, and the merits and risks of its investment in the Investment Shares, in each case, to the extent the Purchaser has requested any such information in connection with its evaluation of an investment in the Investment Shares.  The Purchaser has had an opportunity to inspect the Company’s facilities, and discuss with, and ask questions of, the Company’s directors and management regarding the business, operations, assets, condition (financial and otherwise), operating results, liabilities and prospects of the Company and its subsidiaries and the terms and conditions of the Purchaser’s investment in the Investment Shares, and the Purchaser is satisfied with those inspections, discussions and the answers to its questions.

(d)           As of the date of this Agreement, neither the Purchaser nor any of its Affiliates is the Beneficial Owner of any Securities.

5.5          Brokers.

The Purchaser has not directly or indirectly retained any investment banker, broker or finder in connection with the purchase of the Investment Shares.  The Purchaser will indemnify and hold the Company harmless against any liability, settlement or expense arising out of, or in connection with, any actual or claimed direct or indirect retention by the Purchaser of an investment banker, broker or finder in connection with the purchase of its Investment Shares.

5.6          Independent Investigation; No Reliance.

In connection with its investment decision, the Purchaser and/or its representatives have inspected and conducted such reasonable independent review, investigation and analysis (financial and otherwise) of the Company as desired by the Purchaser.  The purchase of the Investment Shares by the Purchaser and the consummation of the transactions contemplated hereby by the Purchaser are not done in reliance upon any representation or warranty by, or information from, the Company or any of its Affiliates, employees or representatives, whether oral or written, express or implied, except for the representations and warranties specifically and expressly set forth in Article IV, and the Purchaser acknowledges that the Company expressly disclaims any other representations and warranties.  Such purchase and consummation are instead done entirely on the basis of the Purchaser’s own investigation, analysis, judgment and assessment of the present and potential value and earning power of the Company, as well as

13

those representations and warranties by the Company specifically and expressly set forth in Article IV.  The Purchaser acknowledges that the Company has not made any representations or warranties to the Purchaser regarding the probable success or profitability of the Company or its business.  The Purchaser further acknowledges that neither the Company nor any other Person has made any representation or warranty, express or implied, as to the accuracy or completeness of any information regarding the Company, its business or the transactions contemplated by this Agreement not specifically and expressly set forth in Article IV, and neither the Company nor any other Person will have or be subject to any liability to the Purchaser or any other Person resulting from the distribution to the Purchaser or its representatives or the Purchaser’s use of any such information, including any confidential information distributed on behalf of the Company relating to its business or other publications or data room (including any electronic or “virtual” data room) information provided or made available to the Purchaser or its representatives, or any other document or information in any form provided or made available to the Purchaser or its representatives, including management presentations and/or projections, in connection with the purchase and sale of the Investment Shares and the transactions contemplated hereby.

ARTICLE VI:  PRE-CLOSING COVENANTS AND AGREEMENTS

6.1          Publicity.

Concurrently with the execution and delivery of this Agreement, the parties will collaboratively prepare and release a joint press release regarding this Agreement and the transactions contemplated hereby, and promptly thereafter, Molycorp will file a Current Report on Form 8-K with the SEC regarding the same.  Except for such joint press release and Form 8-K, neither party will issue (or cause to be issued) any press release or other public announcement relating to the existence or subject matter of this Agreement or the transactions contemplated hereby, except as required by applicable Law or with the prior written consent of the other party, which consent will not be unreasonably withheld, conditioned or delayed.  Except as otherwise contemplated by this Section 6.1, the parties will remain bound by the Nondisclosure Agreement, dated as of June 30, 2011 (the “Nondisclosure Agreement”), which will survive the execution and delivery of this Agreement in accordance with its terms.

6.2          Regulatory Filings and Other Actions.

(a)           Each of the Purchaser and the Company shall coordinate and cooperate with one another and shall each use commercially reasonable efforts to comply with, and shall each refrain from taking any action that would impede compliance with, all applicable Laws, and as soon as practicable and, in any event, within 10 Business Days after the date hereof, the Purchaser and the Company shall make all filings, notices, petitions, statements, registrations, submissions of information, application or submission of other documents required by any Governmental Entity necessary or advisable in connection with the transactions contemplated by this Agreement, including (i) notification and report forms with the United States Federal Trade Commission and the Antitrust Division of the United States Department of Justice under the HSR Act, and joint notice to The Committee on Foreign Investment in the United States (“CFIUS”) under FINSA, and (ii) any other filings necessary to satisfy the condition precedent set forth in Section 8.1(b) in connection with the transactions contemplated hereby.  Each of the Company and the Purchaser shall be responsible for its own costs and expenses incurred in connection with such filings, and shall share equally and each pay fifty percent of all filing fees payable in connection with such filings (with the understanding that the parties will cooperate such that only a single payment is made to each Governmental Entity for each such filing fee).  Each of the Company and the Purchaser shall cause all documents that it is responsible for filing with any Governmental Entity under this Section 6.2(a) to comply in all material respects with all applicable Law.

14

(b)           The Purchaser and the Company each shall promptly supply the other with any information which may be required in order to effectuate any filings or applications pursuant to Section 6.2(a).  Subject to applicable Law relating to the exchange of information and the preservation of any applicable attorney-client privilege, work-product doctrine, self-audit privilege, or other similar privilege, each of the Company and the Purchaser shall use commercially reasonable efforts to collaborate in reviewing and commenting on, and consulting with one another on, information relating to the Company or the Purchaser or any of their respective Affiliates that appears in any filing made with, or written materials submitted to, any third party and/or any Governmental Entity in connection with any filing, investigation, or proceeding in connection with this Agreement or the transactions contemplated hereby.  Notwithstanding anything in this Section 6.2 to the contrary, with respect to the matters covered in this Section 6.2, it is agreed that the Company, after consulting with the Purchaser and considering the Purchaser’s views in good faith, shall make all decisions, lead all discussions, negotiations and other proceedings with, and coordinate all activities with respect to any requests that may be made by, or any actions, consents, undertakings, approvals, or waivers that may be sought by, any Governmental Entity, including determining the manner in which to contest or otherwise respond, by litigation or otherwise, to objections to, or proceedings challenging, the consummation of the transactions contemplated by this Agreement.

(c)           Each of the Purchaser and the Company shall notify the other promptly upon the receipt of (i) any comments from any officials of any Governmental Entity in connection with any filings made pursuant to Section 6.2(a) and (ii) any request by any officials of any Governmental Entity for amendments or supplements to any filings made pursuant to Section 6.2(a).  Whenever any event occurs that is required to be set forth in an amendment or supplement to any filing made pursuant to Section 6.2(a), the Purchaser or the Company, as the case may be, shall promptly inform the other of such occurrence and cooperate in filing with the applicable Governmental Entity such amendment or supplement.

(d)           Upon the terms and subject to the conditions set forth in this Agreement, each of the Purchaser and the Company agrees to use its commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated by this Agreement, including using commercially reasonable efforts to accomplish the following: (i) the taking of all reasonable acts necessary to cause the conditions to Closing set forth in Article VIII to be satisfied (provided that no party shall be required to waive any of its own conditions to Closing set forth in Article VIII); (ii) the obtaining of all necessary Consents from Governmental Entities and other third parties and the making of all filings and the taking of all steps as may be necessary to obtain Consent from, or to avoid a Claim by, any Governmental Entity (it being understood that failure to obtain any one or more such Consents, in and of itself, shall not constitute a failure by either party to comply with any of its covenants herein or a failure of a condition to Closing hereunder); (iii) the defending of any Claims, whether judicial or administrative, challenging this Agreement or the consummation of the transactions contemplated hereby, including seeking to have any stay or temporary restraining order entered by any court or other Governmental Entity vacated or reversed; and (iv) the execution and delivery of any additional instruments necessary to consummate the transactions contemplated by, and to fully carry out the purposes of, this Agreement.

6.3          Pre-Closing Standstill Agreement.

The Purchaser agrees that during the Pre-Closing Standstill Period (except as contemplated by this Agreement):

15

(a)           The Purchaser will not, and will cause its Affiliates not to, directly or indirectly, acquire Beneficial Ownership of any Securities.  In addition, the Purchaser will not, and will cause its Affiliates not to, make any public announcement with respect to, or submit any proposal for or with respect to (i) the acquisition of Beneficial Ownership of any Securities, or (ii) any extraordinary transaction or merger, consolidation, sale of substantial assets or business combination involving the Company or any of its Affiliates, whether or not any Persons other than stakeholders of the Purchaser are involved and whether or not such proposal might require the making of a public announcement by the Company.

(b)           Without the express prior written approval of the Company, the Purchaser will not, and will cause its Affiliates not to, join a partnership, limited partnership, syndicate or other group, or otherwise act in concert with any Person, for the purpose of acquiring, holding, voting or disposing of Securities.

(c)           Without the express prior written approval of the Company, no director or executive officer of the Purchaser will, and the Purchaser will not permit any of its Affiliates or any of its or their respective officers, employees or agents (including investment bankers) to, induce or attempt to induce or give encouragement to any Person, or enter into any substantive discussions or negotiations with any Person, in furtherance of any tender offer or business combination transaction in which Securities would be acquired.

6.4          Reservation of Common Stock.

As of the date hereof through the Closing, the Company has reserved and the Company shall continue to reserve and keep available at all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company to issue the Investment Shares pursuant to this Agreement.

6.5          Integration.

The Company will not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Investment Shares in a manner that would require the registration under the Securities Act of the sale of the Investment Shares to the Purchaser or that would be integrated with the offer or sale of the Investment Shares for purposes of the rules and regulations of any Trading Market such that it would require stockholder approval prior to the closing of such other transaction unless stockholder approval is obtained before the closing of such subsequent transaction.

ARTICLE VII:  INVESTOR RIGHTS AND OTHER POST-CLOSING AGREEMENTS

7.1          Transfer Restrictions.

Following the Closing, and subject to Section 7.2, the Purchaser acknowledges and agrees that the Investment Shares may be Transferred only as follows:  (a) Transfers to the Company; (b) Transfers of Investment Shares pursuant to a registration statement filed under the Securities Act; (c) Transfers made pursuant Rule 144 under the Securities Act, subject to any volume limitations imposed thereby; and (d) other Transfers that are made (i) in compliance with the Securities Act and the rules and regulations promulgated thereunder and (ii) if made on or before the two-year anniversary of the Closing Date, the number of Investment Shares sold in connection therewith on any given Trading Day does not exceed 10% of the aggregate number of Investment Shares acquired by the Purchaser pursuant to this Agreement.  The Purchaser agrees that the foregoing restrictions preclude the Purchaser from engaging in any hedging

16

or other transaction that is designed or reasonably expected to lead to or result in a Transfer of any of the Investment Shares that would not otherwise be allowed above, even if the Investment Shares would be Transferred by a Person other than the Purchaser.  The Purchaser agrees and consents to the entry of stop-transfer instructions with the Company’s transfer agent against the Transfer of any of the Investment Shares in violation of this Section 7.1.

7.2          Post-Closing Standstill Agreement.

The Purchaser agrees that during the Post-Closing Standstill Period:

(a)           The Purchaser will not, and will cause its Affiliates not to, directly or indirectly, acquire Beneficial Ownership of any shares of Common Stock or Common Stock Equivalents, in each case, now or hereafter outstanding (collectively, “Securities”), if the effect of such acquisition would be to increase the aggregate Beneficial Ownership of Securities of the Purchaser to greater than 19.9% of the total number of shares of Common Stock then outstanding (the “Percentage Limitation”), it being understood that, subject to satisfaction of all applicable requirements of Law, the Purchaser may acquire additional Securities to increase its Beneficial Ownership of Securities of the Purchaser up to the Percentage Limitation.  In addition, the Purchaser will not, and will cause its Affiliates not to, make any public announcement with respect to, or submit any proposal for or with respect to (i) the acquisition of Beneficial Ownership of any Securities if the effect of such acquisition would be to cause the Beneficial Ownership of the Purchaser and its Affiliates to exceed the Percentage Limitation, or (ii) any extraordinary transaction or merger, consolidation, sale of substantial assets or business combination involving the Company or any of its Affiliates, whether or not any Persons other than stakeholders of the Purchaser are involved and whether or not such proposal might require the making of a public announcement by the Company.

(b)           Without the express prior written approval of the Company, the Purchaser will not, and will cause its Affiliates not to, directly or indirectly, solicit proxies or initiate, propose or become a “participant” in a “solicitation” (as such terms are defined in Regulation 14A under the Exchange Act), in opposition to any matter that has been recommended by a majority of the members of the Board or in favor of any matter that has not been approved by a majority of the members of the Board or seek to advise, encourage or influence any Person with respect to the voting of Securities in such manner, or initiate, or induce or attempt to induce any Person to initiate, any shareholder proposal relating to the Company.  In addition, the Purchaser will not, and will cause its Affiliates not to, directly or indirectly, institute, prosecute or pursue against the Company (or any of its officers, directors, representatives, employees, attorneys, advisors, agents, Affiliates or associates) (i) any Claim with respect to any action that is hereafter approved by a majority of the members of the Board or (ii) any Claim on behalf of any class or classes of the Company’s security holders.

(c)           Without the express prior written approval of the Company, the Purchaser will not, and will cause its Affiliates not to, join a partnership, limited partnership, syndicate or other group, or otherwise act in concert with any Person, for the purpose of acquiring, holding, voting or disposing of Securities.

(d)           Without the express prior written approval of the Company, no director or executive officer of the Purchaser will, and the Purchaser will not permit any of its Affiliates or any of its or their respective officers, employees or agents (including investment bankers) to, induce or attempt to induce or give encouragement to any Person, or enter into any substantive discussions or negotiations with any Person, in furtherance of any tender offer or business combination transaction in which Securities would be acquired; provided, that nothing in this Section 7.2(d) will, or will be construed, directly or indirectly,

17

to limit any rights of the Purchaser to Transfer any Investment Shares pursuant to any transaction effected in accordance with Section 7.1.

(e)In addition to any other limitations with respect to the Purchaser’s and its Affiliates’ ability to engage in transactions involving any Securities (including pursuant to Section 7.1), the Purchaser (i) acknowledges that the United States Federal securities Laws and other Laws prohibit any Person in possession of material non-public information about a company from purchasing or selling securities of that company or from communication such information to any other Person under circumstances in which it is reasonably foreseeable that such Person is likely to purchase or sell such securities, and, accordingly, (ii) agrees not to (A) engage in any transactions involving any Securities while it is in possession of any such material non-public information, including any such material non-public information it may have received pursuant to the Nondisclosure Agreement, or (B) communicate any such material non-public information to any other Person, except as expressly permitted by the Nondisclosure Agreement.

7.3Purchaser Right to Nominate Director.

(a)In accordance with the Bylaws, the Company will take all actions as may be necessary or appropriate to expand the size of its Board by one seat and to fill the vacancy created thereby by appointing the Purchaser Director to serve as a Class II director on the Board, effective as of the Closing Date.  Prior to the Closing Date, the Company shall also take all actions as may be necessary or appropriate to present to the Board (or an authorized committee thereof) such Purchaser Director (or, if such director is not able to continue to serve on the Board for whatever reason, his successor as nominated by Purchaser pursuant to Section 7.3(b)) for nomination as a candidate for election as a Class II director at the Company’s next annual meeting of stockholders in accordance with Section 7.3(b).

(b)As long as the Purchaser and its Affiliates, in the aggregate, Beneficially Own (i) during the period from the Closing until the three-year anniversary thereof, at least 50% of the number of Investment Shares acquired hereunder, and (ii) from and after the three-year anniversary of the Closing, at least five percent of the aggregate shares of Common Stock then outstanding (the “Nomination Requirements”), the Purchaser will have the right to nominate one Class II director to the Board pursuant to this Section 7.3(a) (the “Purchaser Director”).  The Purchaser may nominate its Purchaser Director at every annual meeting of the stockholders of the Company in which Class II directors are generally elected, including at every adjournment or postponement thereof, and on any action or approval by written consent of the stockholders of the Company relating to the election of such directors generally; provided, that the Purchaser may not have any more than one Purchaser Director on the Board at any particular time.  In addition to the provisions contained in this Section 7.3, the Purchaser Director will be subject to the provisions applicable to Class II directors contained in the Certificate of Incorporation and Bylaws.

(c)The following procedures will be followed with respect to the nomination of the Purchaser Director pursuant to this Section 7.3:

(i)For purposes of whether the Purchaser has a right to nominate the Purchaser Director pursuant to Section 7.3(a), the Purchaser’s Beneficial Ownership of the outstanding shares of Common Stock will be measured as of the record date for such annual meeting or written consent.

(ii)No later than January 10 of each year in which Class II directors are to be elected, the Purchaser must provide the Board with the Purchaser’s nominee for the Purchaser Director, along with any other information reasonably requested by the Board to evaluate the

18

suitability of such candidate for directorship.  With respect to any Purchaser nominee, the Purchaser will use its best efforts to ensure that any such nominee satisfies all stated criteria and guidelines for director nominees of the Company.

(iii)Within 20 days of receiving the Purchaser’s nominee for the Purchaser Director in accordance with Section 7.3(c)(ii), the Board or any authorized committee thereof will make a good faith and reasonable determination as to the suitability of the Purchaser’s nominee for Purchaser Director and will notify the Purchaser of its determination in writing.

(iv)If the Board or any authorized committee thereof approves of the Purchaser’s nominee for Purchaser Director, then the Board will recommend that the stockholders vote to elect such nominee at the next annual meeting of stockholders at which Class II directors will be generally elected.

(v)If the Board or any authorized committee thereof raises a reasonable objection to the Purchaser’s nominee for the Purchaser Director, then the Purchaser and the Board will attempt to agree on the nominee for such Purchaser Director, and if the Purchaser and the Board cannot agree on the nominee on or before the tenth day prior to the proposed filing of the Company’s annual proxy statement pursuant to which Class II directors will be elected, then such nominee for Purchaser Director will not be nominated by the Company at such annual meeting.

(vi)If the Purchaser nominee is not nominated (as described in the foregoing clause (v)), then as soon as practicable after the annual meeting, the Purchaser and the Board will attempt to agree on the nominee for such Purchaser Director which nominee will be appointed as Class II director by the Board promptly after such agreement is reached.

(d)Notwithstanding anything to the contrary in this Agreement and without any further action by the Company, the Purchaser’s right to nominate the Purchaser Director will automatically terminate, and be of no further force and effect, and the Purchaser will cause its Purchaser Director to resign from the Board, effective as of the date that the Nomination Requirements are no longer satisfied.  The Purchaser will promptly, but in any case within five days after becoming aware thereof, provide notice to the Company if the Nomination Requirements are no longer satisfied.

(e)Each Purchaser Director, upon appointment or election to the Board, will be governed by the same protections and obligations as all other directors of the Company, including protections and obligations regarding customary liability insurance for directors and officers, confidentiality, conflicts of interests, fiduciary duties, trading and disclosure policies, director evaluation process, director code of ethics, director share ownership guidelines, stock trading and pre-approval policies, and other governance matters.  In addition to the Indemnification Agreement, the Company agrees that it will offer to enter into an indemnification agreement with each Purchaser Director substantially similar to the indemnification agreements then in effect with the Company’s other directors when each such Purchaser Director becomes a member of the Board.

(f)In addition to its agreements set forth in Section 7.2, during the Post-Closing Standstill Period, the Purchaser will (i) cause all shares of Common Stock Beneficially Owned by the Purchaser as to which it is entitled to vote at any meeting of stockholders to be voted in favor of the election of each member of any slate of directors recommended by the Board in accordance with this Section 7.3, and (ii) not, except as provided for in this Section 7.3, seek, alone or in concert with others, election or appointment to, or representation on, or nominate or propose the nomination of any candidate to, the Board.

19

7.4Demand Registration Rights.

(a)Demand Registration Rights.  From and after the date that is 181 days after the Closing Date, the Purchaser shall have the right to make three written requests that the Company file with the SEC a Registration Statement on Form S-3 under the Securities Act covering the resale of all or a portion of the Investment Shares by the Purchaser; provided, that the Company will not be required to file any Registration Statement if it is not then eligible to file registration statements under the Securities Act on a Form S-3.  The Company shall prepare and file with the SEC a shelf Registration Statement covering the resale of all or a portion of the Investment Shares for an offering to be made on a continuous basis pursuant to Rule 415 as soon as reasonably practicable after the Company receives any such written demand for registration.  The Company will use its commercially reasonable efforts to cause any such Registration Statement to become effective as soon as reasonably practicable after it is filed.  The Registration Statement will provide for the resale of all or a portion of the Investment Shares by the Purchaser from time to time, and pursuant to any method or combination of methods legally available, by the Purchaser and permitted transferees hereunder; provided, that the Company will not be required to provide for the distribution of the Investment Shares by means of an underwritten public offering pursuant to this Section 7.4(a).  The Company shall not be required to effect a registration pursuant to this Section 7.4 while any other Registration Statement filed pursuant to an exercise of the Purchaser’s registration rights provided for in this Section 7.4 is then effective or within six months of any registration initiated by the Company to make a bona fide, primary and underwritten offering of equity securities.  All fees and expenses incurred in connection with a registration pursuant to this Section 7.4(a), including all registration, qualification, printers’, accounting and Company counsel fees, will be borne by the Company.  All fees and expenses of counsel to the Purchaser and any other expenses exclusive to the Purchaser, including brokerage commissions or fees, will be borne by the Purchaser.  Notwithstanding anything contained herein to the contrary, the Company shall not be required to file a Registration Statement under this Section 7.4 unless at least 25% of the Investment Shares issued by the Company on the Closing Date are covered by such Registration Statement.

(b)The Company’s Obligations.  When the Company is required by this Section 7.4 to file a Registration Statement to register the resale of all or a portion of the Investment Shares, the Company agrees to:

(i)subject to Section 7.4(d) and (e), use its commercially reasonable efforts to cause any such Registration Statement to become and remain continuously effective under the Securities Act for a period of at least twelve months;

(ii)subject to Section 7.4(d) and (e), prepare and file with the SEC such amendments and supplements to any such Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such Registration Statement effective for a period of at least twelve months;

(iii)as far in advance as practicable but at least five Business Days prior to filing a Registration Statement or Prospectus (or any amendment or supplement thereto, other than documents filed under the Exchange Act that amend or supplement such Registration Statement through incorporation by reference), furnish to the Purchaser, for its review, copies of such Registration Statement or Prospectus (or amendment or supplement) as proposed to be filed; and provided that the Purchaser may request reasonable changes to such Registration Statement or Prospectus (or amendment or supplement) and shall be required to comply therewith (A) if the Purchaser reasonably believes that the provisions in question would have an impact or effect on it, or (B) solely to the extent necessary, if at all, to lawfully complete the filing or maintain the effectiveness thereof;

20

(iv)furnish to the Purchaser such number of conformed copies of any such Registration Statement and of each such amendment and supplement thereto (in each case including all exhibits, other than exhibits filed under the Exchange Act that amend or supplement such Registration Statement through incorporation by reference), such number of copies of the Prospectus included in any such Registration Statement (including each preliminary Prospectus and any summary Prospectus), in conformity with the requirements of the Securities Act, such documents incorporated by reference in such Registration Statement or Prospectus, each free writing prospectus incident thereto, and such other documents as the Purchaser may reasonably request, and a copy of any and all transmittal letters or other correspondence to or received from the SEC or any other Governmental Entity or self-regulatory body or other body having jurisdiction (including any domestic or foreign securities exchange) relating to such offering;

(v)ensure that at the time of pricing the offering of any Investment Shares, any such Registration Statement, Prospectus or Prospectus supplement included in such Registration Statement, as then in effect, and any free writing prospectus related thereto, includes all information necessary such that a seller of such Investment Shares would not be liable under Section 12(a)(2) of the Securities Act, and such offering and the sale of such Investment Shares in connection therewith would not constitute a violation of Section 12(a)(2) of the Securities Act;

(vi)notify the Purchaser (which notice shall, pursuant to subclauses (C) through (F) hereof, be accompanied by an instruction to suspend the use of the Prospectus until the requisite changes have been made) as promptly as reasonably practicable (and, in the case of subclause (A)(x) hereof, not less than one Trading Day prior to such filing):

(A)(x) when a Prospectus or any Prospectus supplement or post-effective amendment to a Registration Statement is proposed to be filed (other than documents filed under the Exchange Act that amend or supplement such Registration Statement through incorporation by reference); (y) when the SEC notifies the Company whether there will be a “review” of such Registration Statement and whenever the SEC comments in writing on such Registration Statement; and (z) with respect to a Registration Statement or any post-effective amendment (other than documents filed under the Exchange Act that amend or supplement such Registration Statement through incorporation by reference), when the same has become effective;

(B)of any request by the SEC or any other federal or state Governmental Entity for amendments or supplements to a Registration Statement or Prospectus or for additional information;

(C)of the issuance by the SEC or any other federal or state Governmental Entity of any stop order suspending the effectiveness of a Registration Statement covering any or all of the Investment Shares or, to the knowledge of the Company, the initiation of any Claim for that purpose;

(D)of the receipt by the Company of any written notification with respect to the suspension of the qualification or exemption from qualification of any of the Investment Shares for sale in any jurisdiction, or, to the knowledge of the Company, the initiation or threatening of any Claim for such purpose; and

(E)of the occurrence of any event or passage of time that makes the financial statements included in a Registration Statement ineligible for inclusion therein or that requires any revisions to a Registration Statement, Prospectus or other documents

21

so that, in the case of a Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;

(vii)take all commercially reasonable actions required to prevent the entry of any stop order or to promptly remove it if entered and promptly notify the Purchaser of such lifting or withdrawal of such order;

(viii)take all commercially reasonable action to ensure that any free writing prospectus utilized in connection with any registration covered by this Section 7.4 complies in all material respects with the Securities Act, is filed in accordance with the Securities Act to the extent required thereby, is retained in accordance with the Securities Act to the extent required thereby and, when taken together with the related Prospectus and any free writing prospectus, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;

(ix)use commercially reasonable efforts to register for resale or qualify all Investment Shares covered by any such Registration Statement under the securities or blue sky laws of such jurisdictions as the Purchaser or any underwriter of such Investment Shares shall request, and promptly notify the Purchaser of the receipt of any notification with respect to the suspension of the qualification of Investment Shares for sale or offer in any such jurisdiction;

(x)use commercially reasonable efforts to obtain all appropriate registrations, permits and consents in connection therewith, and do any and all other acts and things (including commercially reasonable efforts to promptly remove any such suspension) which may be necessary or advisable to enable the Purchaser or any such underwriter to consummate the disposition in such jurisdictions of the Investment Shares covered by any such Registration Statement; provided, that the Company shall not for any such purpose be required to qualify generally to do business as a foreign corporation in any such jurisdiction wherein it is not so qualified, to consent to general service of process in any such jurisdiction or to amend its Certificate of Incorporation or Bylaws;

(xi)use its commercially reasonable efforts to list all such Investment Shares covered by any such registration on the Trading Market or such other securities exchange and automated inter-dealer quotation system on which shares of Common Stock of the Company are then listed;

(xii)furnish for delivery in connection with the sale of Investment Shares pursuant to a registration effected pursuant to Section 7.4(a) unlegended certificates representing ownership of the Investment Shares being sold in such denominations as shall be requested by the Purchaser, subject to receipt of undertakings by the Purchaser regarding compliance with the terms hereof, but only in connection with the actual sale of such Investment Shares; and

(xiii)otherwise comply in all material respects with all applicable securities laws, including the rules and regulations of the SEC.

(c)Rule 144.  The Company will not be obligated to register the resale of Investment Shares under this Section 7.4, or otherwise keep a Registration Statement effective, if all such shares are otherwise eligible for immediate sale (without any volume restrictions imposed by Rule 144) by the

22

Purchaser under Rule 144 under the Securities Act and this Agreement.  As long as the Purchaser and its Affiliates, in the aggregate, Beneficially Own at least 25% of the Investment Shares, if the Company is not required to file reports pursuant to the Exchange Act, it will prepare and furnish to the Purchaser and make publicly available in accordance with Rule 144 such information as is required for the Purchaser to sell the Investment Shares under Rule 144.

(d)The Company’s Right to Postpone or Suspend Registration.

(i)If, in connection with any registration pursuant to this Section 7.4, the Company provides a certificate, signed by the President or Chief Executive Officer of the Company, to the Purchaser stating that, in the good faith judgment of the Board and its counsel, it would be materially detrimental to the Company or its stockholders for any Registration Statement either to become effective or to remain effective for as long as such Registration Statement otherwise would be required to remain effective, then the Company shall have the right to defer taking action with respect to such filing and any time periods with respect to filing or effectiveness thereof shall be tolled correspondingly, for a period of not more than 60 consecutive days; provided, that the Company may not invoke this right more than once in any 365-day period; and provided, further, that the Company shall not register any shares of its capital stock on a registration statement under the Securities Act during such period, other than pursuant to a registration statement on Form S-8.

(ii)If the Company has delivered a Prospectus, Prospectus supplement or free writing prospectus to the Purchaser and after having done so the Prospectus, Prospectus supplement or free writing prospectus is amended to comply with the requirements of the Securities Act, the Company shall promptly notify the Purchaser and, if requested, the Purchaser shall immediately cease making offers of Investment Shares and return to the Company all Prospectuses, Prospectus supplements and free writing prospectuses in its possession.  The Company shall promptly provide the Purchaser with revised Prospectuses, Prospectus supplements and free writing prospectuses, as applicable, and, following receipt of the revised Prospectuses, Prospectus supplements and free writing prospectuses, as applicable, the Purchaser shall be free to resume making offers of the Investment Shares.

(iii)In the event that, in the judgment of the Company, it is advisable to suspend use of a Prospectus included in a Registration Statement due to pending material developments or other events that have not yet been publicly disclosed and as to which the Company believes public disclosure would be detrimental to the Company, the Company shall direct the Purchaser to discontinue sales of Investment Shares pursuant to such Registration Statement, and the Purchaser shall immediately so discontinue, until the Purchaser has received copies of a supplemented or amended Prospectus or until the Purchaser is advised in writing by the Company that the then current Prospectus may be used and has received copies of any additional or supplemental filings that are incorporated or deemed incorporated by reference in such Prospectus.  The Company shall provide the Purchaser with any such supplemented or amended Prospectuses or additional or supplemental filings, as the case may be.  Notwithstanding anything to the contrary in this Agreement, the Company shall not exercise its rights under this Section 7.4(d)(iii) to suspend sales of Investment Shares for a period in excess of 60 consecutive days or more than an aggregate of 90 days during any 365-day period.

(e)Indemnification.

(i)The Company shall, notwithstanding any termination of this Agreement, indemnify, defend and hold harmless the Purchaser to the fullest extent permitted by applicable

23

Law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, to the extent resulting from any untrue statement of a material fact contained in a Registration Statement, any Prospectus or any form of Prospectus or in any amendment or supplement thereto or in any preliminary Prospectus filed pursuant to this Section 7.4, or any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances under which they were made; provided, that the Company will not be liable in any such case to the extent that any Losses arise out of or are based upon (A) an untrue statement or omission in the Registration Statement, the Prospectus or any amendment or supplement thereto or in any preliminary Prospectus made in reliance upon and in conformity with information that was furnished to the Company by or on behalf of the Purchaser expressly for use therein, or (B) in the case of an occurrence of an event of the type specified in Section 7.4(b)(vi)(C)-(E), the use by the Purchaser of an outdated or defective Prospectus after the Company has notified the Purchaser in writing that the Prospectus is outdated or defective and prior to the Purchaser being advised by the Company that the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed.

(ii)The Purchaser shall, notwithstanding any termination of this Agreement, indemnify, defend and hold harmless the Company to the fullest extent permitted by applicable Law, from and against any and all Losses, as incurred, to the extent resulting from any untrue statement of a material fact contained in any Registration Statement, any Prospectus, or any form of Prospectus or in any amendment or supplement thereto or in any preliminary Prospectus filed pursuant to this Section 7.4, or any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances under which they were made (A) to the extent that such untrue statement or omission is contained in any information so furnished in writing by the Purchaser to the Company for inclusion in such Registration Statement, Prospectus or any amendment or supplement thereto or in any preliminary Prospectus, or (B) in the case of an occurrence of an event of the type specified in Section 7.4(b)(vi)(C)-(E), the use by the Purchaser of an outdated or defective Prospectus after the Company has notified the Purchaser in writing that the Prospectus is outdated or defective and prior to the Purchaser being advised by the Company that the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed.

ARTICLE VIII:  CONDITIONS TO OBLIGATIONS OF PARTIES

8.1Conditions to Obligations of Each Party.

The respective obligations of each party hereto to consummate the transactions contemplated by this Agreement shall be subject to the satisfaction at or prior to the Closing Date of the following conditions:

(a)no Governmental Entity of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation, executive order, decree, injunction or other Order which (i) is in effect and (ii) has the effect of otherwise prohibiting or preventing the consummation of the transactions contemplated hereby; and

(b)(i) all waiting periods under the HSR Act and FINSA relating to the transactions contemplated hereby will have expired or been terminated; (ii) in the event the parties determine to file the voluntary notice with CFIUS pursuant to Section 6.2(a), (x) CFIUS, through its Staff Chairperson, shall have advised a party (or the parties) in writing that none of the transactions contemplated hereby is a covered transaction, (y) the parties to the transactions contemplated hereby shall have been advised in

24

writing pursuant to 31 C.F.R. § 800.504 or § 800.506(d) that CFIUS has concluded all action under Section 721 with respect to such transactions, or (z) the President of the United States shall have announced, pursuant to Section 721(d), his decision not to exercise his authority under Section 721 with respect to the transactions contemplated hereby, in each case with no conditions imposed; and (iii) all other Consents of any Governmental Entity required to be obtained or made in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby shall have been obtained or made.

8.2Conditions to the Company’s Obligations.

The obligations of the Company to consummate the transactions contemplated by this Agreement are subject to the satisfaction, on or prior to the Closing Date, of each of the following conditions, any of which may be waived by the Company:

(a)each of the representations and warranties of the Purchaser in Article V that are qualified by materiality shall be true and correct in all respects and each of the representations and warranties made by the Purchaser in Article V that are not so qualified will be true and correct in all material respects, in each case, as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date (except that those representations and warranties which address matters only as of a particular date need only be true and correct as of such date);

(b)the Purchaser shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Closing Date; and

(c)the Purchaser shall have made all deliveries set forth in Section 3.1(b).

8.3Conditions to the Purchaser’s Obligations.

The obligations of the Purchaser to consummate the transactions contemplated by this Agreement are subject to the satisfaction, on or prior to the Closing Date, of each of the following conditions, any of which may be waived by the Purchaser:

(a)each of the representations and warranties of the Company in Article IV that are qualified by materiality or Material Adverse Effect shall be true and correct in all respects and each of the representations and warranties made by the Company in Article IV that are not so qualified will be true and correct in all material respects, in each case, as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date (except that those representations and warranties which address matters only as of a particular date need only be true and correct as of such date);

(b)the Company shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by it at or prior to the Closing Date; and

(c)the Company shall have made all deliveries set forth in Section 3.1(a).

ARTICLE IX:  TERMINATION

9.1Termination.

This Agreement may be terminated prior to the Closing:

25

(a)by written agreement executed by the Purchaser and the Company;

(b)by the Purchaser or the Company at any time after July 31, 2012 (the “End Date”) if the Closing shall not have taken place on or before such date; provided, that the right to terminate this Agreement under this Section 9.1(b) shall not be available to any party whose failure to fulfill any obligation hereunder has been the cause of, or resulted in, the failure of the Closing to occur on or before such date;

(c)by the Purchaser, if the Company shall have breached or failed to perform in any material respect any of its representations, warranties, covenants or other agreements contained in this Agreement and such breach or failure to perform (i) is not cured on or prior to the 30th day after written notice thereof from the Purchaser (reasonably describing the nature of the breach or failure) or (ii) is incapable of being cured, as the case may be; or

(d)by the Company, if the Purchaser shall have breached or failed to perform in any material respect any of its representations, warranties, covenants or other agreements contained in this Agreement and such breach or failure to perform (i) is not cured on or prior to the 30th day after written notice thereof from the Company (reasonably describing the nature of the breach or failure) or (ii) is incapable of being cured, as the case may be.

9.2Notice of Termination; Effect of Termination.

Any termination of this Agreement under Section 9.1 shall be effective immediately upon the delivery of a valid written notice of the terminating party to the other party hereto.  In the event that this Agreement is terminated pursuant to Section 9.1, all obligations of the parties under this Agreement shall terminate and neither party shall have any liability or obligation to the other party except (a) for a willful breach of any of the representations, warranties, covenants or agreements herein or (b) pursuant to this Section 9.2, Section 6.1, Article X or the Nondisclosure Agreement.  A termination of this Agreement will not affect the rights of the non-breaching party to pursue any remedies available to it arising from the breach of the other party.

9.3Extension; Waiver.

At any time prior to the Closing, a party may (a) extend the time for the performance of any of the obligations or other acts of the other party, (b) waive any inaccuracies in the representations and warranties of the other party contained in this Agreement or in any document delivered pursuant to this Agreement or (c) subject to Sections 8.2, 8.3 and 10.11, waive compliance by the other party with any of the agreements or conditions contained in this Agreement.  Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party.  The failure of any party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of such rights.

ARTICLE X:  MISCELLANEOUS

10.1Survival.

(a)Claims for breach of the representations and warranties contained in this Agreement or in any document delivered at Closing will not survive the Closing Date.  From and after the Closing Date, no Claim may be asserted by either party against the other based on a breach of a representation or warranty contained in this Agreement or in any document delivered at Closing; provided, that nothing in

26

this Agreement will preclude or otherwise affect the rights of the Purchaser to assert Claims against the Company for any violations of the securities Laws or for fraud.

(b)The right to bring a Claim based on a breach of any agreement or covenant contained herein will survive for one year after the date that such agreement or covenant, by its term, has been or was required to have been fully performed.

10.2Expenses.

Except as otherwise specifically provided in this Agreement, the Company and the Purchaser will each be responsible for its own costs and expenses incurred in connection with the transactions contemplated by this Agreement (including accountants’ fees, attorneys’ fees and other expenses).

10.3No Third-Party Beneficiaries.

This Agreement does not confer any rights or remedies upon any Person other than the parties hereto and their respective successors and permitted assigns.

10.4Entire Agreement.

This Agreement (together with the Nondisclosure Agreement) constitutes the entire agreement between the Company and the Purchaser with respect to the subject matter hereof, and supersedes any prior understandings, agreements or representations by or between such parties, written or oral, that may have related in any way to the subject matter of this Agreement, including the MOU.

10.5Successors and Assigns.

This Agreement will be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.  Neither party may assign either this Agreement or any of its rights, interests or obligations hereunder without the prior written approval of the other party.

10.6Notices.

All notices, requests, demands, claims and other communications hereunder must be in writing and will be deemed to have been duly given if delivered personally, by facsimile, sent by nationally recognized overnight courier or mailed by registered or certified mail (return receipt requested), postage prepaid, to the parties at the following addresses (or at such other address for a party as will be specified by like notice):

If to the Company, to:

Molycorp, Inc.
5619 Denver Tech Center Parkway, Suite 1000
Greenwood Village, Colorado  80111
Facsimile:  (303) 843-8082
Attention:  Executive Vice President and General Counsel

27

with a copy (which will not constitute notice) to:

Jones Day

325 John H. McConnell Boulevard, Suite 600

Columbus, Ohio  43215

Facsimile:  (614) 461-4198
Attention:  Jeffrey D. Litle, Esq.

If to the Purchaser, to:

Molibdenos y Metales S.A.

Camino Nos a Los Morros 66

San Bernardo

Santiago

Chile

Facsimile:  (562) 937-6653

Attention:  Vice-president of International Business and Planning

with a copy (which will not constitute notice) to:

Morrison & Foerster LLP

555 West Fifth Street, Suite 3500

Los Angeles, California  90013

Facsimile:  (213) 892-5454

Attention:  Michael C. Cohen, Esq.

All such notices and other communications will be deemed to have been given and received (a) in the case of personal delivery, on the date of such delivery, (b) in the case of delivery by facsimile, on the date of such delivery, (c) in the case of delivery by nationally recognized overnight courier, on the third Business Day following dispatch and (d) in the case of mailing, on the seventh Business Day following such mailing.

10.7Governing Law.

THIS AGREEMENT WILL FOR ALL PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, USA, APPLICABLE TO AGREEMENTS MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES OF SUCH STATE.

10.8Consent to Arbitration.

Unless otherwise required by applicable Law or otherwise necessary to prevent irreparable harm (including obtaining injunctive relief), any controversy, Claim or dispute arising out of or relating to this Agreement shall be finally and conclusively settled by arbitration conducted by a panel of three arbitrators, each of whom shall have been engaged in the practice of business law for at least 15 years, to be held in New York, New York, U.S.A., in English, in accordance with the then current Rules of Arbitration of the International Chamber of Commerce (the “ICC”); provided, that no party to this Agreement shall initiate any arbitration until the Chief Executive Officers (or equivalent) of each party to this Agreement have met and discussed resolution of such dispute.  Subject to the foregoing, a party seeking to arbitrate a controversy, Claim or dispute shall send a written notice to the other party hereto and the International Court of Arbitration of the ICC.  The Company, on the one hand, and the Purchaser,

28

on the other hand, shall each select one arbitrator within 20 days of the date of such written notice, and the two arbitrators so chosen shall jointly select a third arbitrator within 15 days of the date the last of such arbitrators is appointed, which third arbitrator shall chair the arbitration panel.  The International Court of Arbitration of the ICC shall administer the arbitration and act as an appointing authority if any of the arbitrators fails to be selected in accordance with the foregoing.  In the event of any conflict between the Rules of Arbitration of the ICC and this Section 10.8, this Section 10.8 shall govern.  The arbitration will be conducted in accordance with the substantive Laws of the State of New York, U.S.A., and the arbitrators will be so instructed.  Not less than 30 days prior to the arbitration, each party shall submit to the other the documents and a list of witnesses it intends to use in the arbitration.  Each party shall have the right to cross-examine any witnesses presented by the other party during the arbitration.  The arbitrators shall issue a written opinion stating the findings of fact and the conclusions of law upon which the decision is based.  The arbitration award shall not include direct, indirect, special, consequential or punitive damages unless caused by the gross negligence or willful misconduct of the breaching party, and the arbitrators shall be so instructed.  The United Nations Convention on the Recognition and Enforcement of Arbitral Awards (New York Convention) shall govern the enforcement of the award, and the principles set forth in this Agreement shall be applied by the arbitrators for both evidence and substantive legal questions during the arbitration, including the rendering of the award.  The arbitration award will be final and binding and may be entered in any court having jurisdiction thereof.  Each party hereto will bear its own costs and attorneys’ fees and shall share the fees and expenses of the arbitrators in the manner determined by the arbitrators.  Any party may seek injunctive relief in an appropriate court of law or equity pending an award in arbitration to prevent irreparable harm in the interim.

10.9Waiver of Jury Trial.

Each party hereby waives to the fullest extent permitted by applicable Law any right it may have to a trial by jury in respect of any litigation directly or indirectly arising out of, under or in connection with this Agreement or the transactions contemplated hereby.  Each party (a) certifies that no representative, agent or attorney of such party has represented, expressly or otherwise, that such party would not, in the event of litigation, seek to enforce the foregoing waiver, and (b) acknowledges that it and the other party have been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this Section10.9.

10.10Press Release and Announcements.

Concurrently with the Closing, the parties will collaboratively prepare and release a joint press release announcing the Closing, and promptly following the Closing, the Company will file a Current Report on Form 8-K with the SEC regarding the same.  Except for such joint press release and Form 8-K, neither party will issue (or cause to be issued) any press release or other public announcement relating to the existence or subject matter of this Agreement or the transactions contemplated hereby, except as required by applicable Law or with the prior written consent of the other party, which consent will not be unreasonably withheld, conditioned or delayed.  Except as otherwise contemplated by this Section 10.10, the parties will remain bound by the Nondisclosure Agreement, which will survive the execution and delivery of this Agreement in accordance with its terms.

10.11Amendments and Waivers.

This Agreement may be amended or modified, and the terms and conditions may be waived, only by a written instrument signed by the Company and the Purchaser.

29

10.12Severability.

It is the desire and intent of the parties that the provisions of this Agreement be enforced to the fullest extent permissible under the Laws and public policies applied in each jurisdiction in which enforcement is sought.  Accordingly, if any particular provision of this Agreement is adjudicated by a court of competent jurisdiction to be invalid, prohibited or unenforceable for any reason, such provision, as to such jurisdiction, will be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.  Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it will, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

10.13Construction.

The descriptive headings of the Articles, Sections and subsections of this Agreement are for convenience of reference only, do not constitute a part of this Agreement, and do not affect this Agreement’s construction or interpretation.  The parties have participated jointly in the negotiation and drafting of this Agreement.  In the event an ambiguity or question of intent or interpretation arises, this Agreement must be construed as if drafted jointly by the parties and no presumption or burden of proof will arise favoring or disfavoring any party by virtue of the authorship of any particular provision of this Agreement.  Where the context requires, the use of a pronoun of one gender or the neuter is to be deemed to include a pronoun of the appropriate gender.  Any reference to the singular in this Agreement shall also include the plural and vice versa.  As used in this Agreement, the words “include” and “including,” and variations thereof, shall not be deemed to be terms of limitation, but rather shall be deemed to be followed by the words “without limitation.”  Unless the context otherwise requires, all references to “$” or dollar amounts will be to lawful currency of the United States.  References herein to any Law shall be deemed to refer to such Law, as amended from time to time, and all rules and regulations promulgated thereunder.  Except as otherwise indicated, all references in this Agreement to “Articles” or “Sections” are intended to refer to Articles and Sections of this Agreement.  The term “knowledge of the Company” or words of similar import means the (a) actual conscious awareness of the Company’s President and Chief Executive Officer, Chief Financial Officer, Chief Technology Officer or Executive Vice President and General Counsel, or (b) the actual conscious awareness that any of the foregoing would reasonably be expected to acquire in the course of having served in such position with the care of an ordinarily prudent executive.

10.14Counterparts.

This Agreement may be executed in one or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same instrument.  Signatures delivered by facsimile or other electronic means will have the same force and effect as manual signatures delivered in person.

10.15Translation.

This Agreement has been drafted, negotiated and executed in the English language.  If this Agreement is translated into another language, the English language text will govern and control for all purposes.

30

IN WITNESS WHEREOF, the parties have executed this Securities Purchase Agreement as of the date first written above.

MOLYCORP, INC.
By:	/s/ Mark A. Smith
	Mark A. Smith
	President and Chief Executive Officer
MOLIBDENOS Y METALES S.A.
By:	/s/ John Graell
	John Graell
	Chief Executive Officer

[Signature Page to Securities Purchase Agreement]

EX-10.8

Exhibit 10.8

AMENDED AND RESTATED

EXECUTIVE EMPLOYMENT AGREEMENT

This Amended and Restated Executive Employment Agreement (this “Agreement”) is made this 28th day of February, 2012 (the “Effective Date”), by and between MOLYCORP, INC., a Delaware corporation (the “Employer”) and DOUGLAS J. JACKSON (the “Executive”).  The Employer and the Executive are referred to below individually as a “Party” and collectively as the “Parties.”

WITNESSETH:

WHEREAS, the Employer and the Executive are currently parties to an Executive Employment Agreement, dated November 1, 2010 (the “Prior Agreement”);

WHEREAS, this Agreement will supersede and completely replace the Prior Agreement as of the Effective Date;

WHEREAS, the Executive agrees to be employed by the Employer upon and subject to the terms herein provided; and

WHEREAS, the Employer agrees to employ the Executive upon and subject to the terms herein provided.

NOW, THEREFORE, in consideration of the foregoing and of the mutual promises, covenants and agreements contained herein, the legal sufficiency of which is acknowledged by the Parties, and intending to be legally bound, the Parties agree as follows:

1.Employment.  The Employer shall employ the Executive, and the Executive accepts continued employment with the Employer, upon the terms and conditions set forth in this Agreement for a period of time beginning on the date hereof and ending as provided in Section 4 (the “Employment Period”).  Notwithstanding anything in this Agreement to the contrary, the Executive will be an at-will employee of the Employer and the Executive or the Employer may terminate the Executive’s employment with the Employer for any reason or no reason at any time.

2.Office and Duties.  The Executive shall serve as, and have the title of, Senior Vice President, Business Development and Sales/Marketing and shall report to, and be subject to the power and authority of, the Chief Executive Officer of the Employer.  The Executive shall manage the affairs of the Employer and have the duties, responsibilities and authority of a Senior Vice President, Business Development and Sales/Marketing.  The Executive shall perform such tasks commensurate with this position as may from time to time be defined or assigned by the Chief Executive Officer of the Employer.  The Executive shall devote all business time, labor, skill, undivided attention and best ability to the performance of the Executive’s duties hereunder in a manner which will faithfully and diligently further the business and interests of the Employer.  During the Employment Period, the Executive shall not directly or indirectly pursue any other business activity without the prior written consent of the Board of Directors of the Employer (the “Board”), except as permitted

under Section 7(f) of this Agreement.  The Executive further agrees to travel to whatever extent is reasonably necessary in the conduct of the Employer’s business, at the Employer’s expense.

3.Compensation and Benefits.

(a)The Employer will pay the Executive a base salary for services rendered under this Agreement at a rate of not less than $325,000.00 per year, payable in accordance with Employer’s standard payroll practices, subject to such payroll and withholding deductions as are required by law or authorized by the Executive.  The Executive shall be eligible for increases in base salary at the sole discretion of the Employer.  The base salary rate in effect for the Executive from time to time pursuant to this Section 3(a) is referred to herein as the Executive’s “Base Salary”.

(b)The Executive shall be entitled to participate in the employee benefit plans (such as medical and dental insurance, disability, life insurance, 401k and sick pay) offered to substantially all of the employees of the Employer.  In addition, the Executive will be eligible for the Employer’s Amended and Restated Management Incentive Compensation Plan (the “MICP”), which is a nonqualified deferred compensation plan to which the Employer may make contributions and the Executive may elect to make deferral contributions from his base salary and bonus, if any.  Employer contributions to the MICP are discretionary and subject to annual Board approval.

(c)The Executive shall be eligible for such bonus plans and long-term equity or cash incentive compensation plans for the Employer’s officers and directors as the Board may establish from time to time, which will be based on the achievement and satisfaction of goals and objectives established by the Board.

(d)The Employer shall reimburse the Executive for all reasonable and actual out-of-pocket costs and expenses, including reasonable travel and business entertainment expenses, incurred by him in the course of performing his duties under this Agreement, subject in all instances to the Employer’s reimbursement policies and requirements applicable to all employees with respect to reporting and documentation of such expenses, including, without limitation, the timely submittal of receipts, invoices and documentation supporting all such costs and expenses.

(e)The Executive shall be entitled to vacation in accordance with the Company’s plans, policies, programs and practices as in effect from time to time.  The Executive will keep the Board apprised of dates for planned vacation.

4.Employment Period.  The Employment Period shall be for the period beginning on the date of this Agreement and ending on November 1, 2013.  On November 1, 2013, and on each succeeding anniversary of such date, the Employment Period shall be extended for an additional year, unless the Employer or the Executive shall have given the other ninety (90) days written notice, prior to November 1, 2013 or any succeeding anniversary commencing after November 1, 2013, that the Employment Period will not be extended.  Notwithstanding the foregoing, (i) the Employment Period shall terminate prior to any such date upon the Executive’s

2

resignation, death or disability and (ii) the Employment Period may be terminated by the Employer at any time prior to any such date for Cause (as defined below) or without Cause.

5.Termination of Employment.

(a)If the Employer terminates the Executive’s employment as a result of the Executive’s death or the Executive’s disability or for Cause (as defined below), the Employer will pay the Executive’s accrued salary, benefits and vacation, including the then unused accrued vacation, up to and including the date of termination (the “Accrued Benefits”), in a single lump sum within thirty (30) days of such termination.  Thereafter, the Employer will have no further obligations to the Executive under this Agreement.

For purposes of this Agreement, “Cause” is defined as:  (1) the Executive’s misconduct, malfeasance, or negligence relative to the Executive’s duties or the Employer’s business; (2) the Executive’s failure or refusal to perform the services required or as requested by the Chief Executive Officer of the Employer, or the Executive’s refusal to carry out or perform proper directions or instructions from the Employer or the Chief Executive Officer of the Employer with respect to the services rendered hereunder; (3) the Executive’s conviction of a crime that either results in a sentence of imprisonment or involves theft, embezzlement, dishonesty or breach of securities or financial laws or regulations; (4) activities by the Executive that are injurious to the Employer, its affiliates or its or their reputation; or (5) any conduct constituting “cause” under applicable law.  Whether Cause exists to justify the termination of this Agreement shall be determined by the Employer in its sole discretion.

(b)If the Employer terminates the Executive’s employment without Cause or if the Executive terminates his employment for Good Reason (as defined below), and such termination does not occur within the twenty-four (24) month period following a Change of Control:

(i)the Employer will pay to the Executive the Accrued Benefits, in a single lump sum within thirty (30) days of such termination;

(ii)the Employer shall continue to pay the Executive his Base Salary at the time of such termination for a period of one (1) year following such termination pursuant to the Employer’s standard pay periods and practices; provided, however, that Base Salary amounts due during the 60-day period following such termination shall not be paid during such 60-day period but instead shall be paid on the first payroll date after such 60-day period;

(iii)the Employer shall pay to the Executive one (1) times the Executive’s target bonus amount under the Employer’s annual incentive plan (which, for the avoidance of doubt, shall include any portion of such bonus amount that may be converted into and paid to the Executive in the form of shares of restricted stock) for the year in which the termination occurs, in a single lump sum on the first payroll date following the sixtieth (60th) day following such termination; and

(iv)if the Executive elects continuation coverage under the Employer’s medical plan pursuant to Part 6 of Subtitle B of Title I of the Employee Retirement Income Security Act of 1974, as amended (“COBRA”), the Employer shall reimburse the

3

Executive for the Executive’s COBRA payments until the earlier of (x) the Executive’s eligibility for any such coverage under another employer’s or any other medical plan or (y) the date that is twelve (12) months following the termination of the Executive’s employment.  The Employer shall make any such reimbursement within thirty (30) days following receipt of evidence from the Executive of the Executive’s payment of the COBRA premium, which evidence shall be provided by the Executive within thirty (30) days of the Executive’s payment of such COBRA premium; provided, however, that any amounts due during the 60-day period following such termination shall not be paid during such 60-day period but instead shall be paid on the first payroll date after such 60-day period.  The Executive agrees that the period of coverage under such plan shall count against such plan’s obligation to provide continuation coverage pursuant to COBRA.

It is expressly understood that the Employer’s obligations under this Section 5(b) (other than payment of the Accrued Benefits) shall cease in the event the Executive breaches any of the agreements in Sections 6 and 7 of this Agreement.  Notwithstanding anything herein to the contrary, the Employer shall not be obligated to make any payments or provide any benefit under this Section 5(b) (other than payment of the Accrued Benefits) unless (x) prior to the sixtieth (60th) day following the termination without Cause or termination for Good Reason, the Executive executes a release of all current or future claims, known or unknown, arising on or before the date of the release, against the Employer and its subsidiaries and the directors, officers, employees and affiliates of any of them, in a form approved by the Employer and (y) any applicable revocation period has expired during such sixty-day period without the Executive revoking such release.  Each payment under this Section 5(b) shall be considered a separate payment and not one of a series of payments for purposes of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).  All payments under Sections 5(b)(ii), (iii) and (iv) shall be deemed severance pay and not wages.

For purposes of this Agreement, “Good Reason” is defined as: the Executive’s termination of his employment with the Employer as a result of (i) any material diminution in the Executive’s authority, duties or responsibilities, (ii) a relocation of the Executive’s principal office to a location that is in excess of fifty (50) miles from its location as of the Effective Date or (iii) any material decrease in the amount of the Executive’s Base Salary. Notwithstanding the foregoing, no termination of employment by the Executive shall constitute a termination for “Good Reason” unless (A) the Executive gives the Employer notice of the existence of an event described in clause (i), (ii) or (iii) above within sixty (60) days following the occurrence thereof, (B) the Employer does not remedy such event within thirty (30) days of receiving the notice described in the preceding clause (A), and (C) the Executive terminates employment within five (5) days of the end of the cure period specified in clause (B), above.

(c)If, during the twenty-four (24) month period following a Change of Control, the Employer terminates the Executive’s employment without Cause or the Executive terminates his employment for Good Reason:

(i)the Employer will pay to the Executive the Accrued Benefits, in a single lump sum within thirty (30) days of such termination;

4

(ii)if (A) the Change of Control constitutes a “change in the ownership or effective control of the Employer, or a change in the ownership of a substantial portion of the assets of the Employer,” within the meaning of Section 409A of the Code and the regulations thereunder (a “409A Change in Control”), the Employer shall make a lump sum payment to the Executive in an amount equal to two (2) times his Base Salary at the time of such termination, paid in a lump sum on the first payroll date following the sixtieth (60th) day following such termination; or (B) the Change of Control does not constitute a 409A Change in Control, the Employer shall (I) make a lump sum payment to the Executive in an amount equal to one (1) times his Base Salary at the time of such termination, paid in a lump sum on the first payroll date following the sixtieth (60th) day following such termination, and (II) continue to pay the Executive his Base Salary at the time of such termination for a period of one (1) year following such termination pursuant to the Employer’s standard pay periods and practices; provided, however, that Base Salary amounts due during the 60-day period following such termination shall not be paid during such 60-day period but instead shall be paid on the first payroll date after such 60-day period;

(iii)the Employer shall make a lump sum payment to the Executive in an amount equal to two (2) times the Executive’s target bonus amount under the Employer’s annual incentive plan (which, for the avoidance of doubt, shall include any portion of such bonus amount that may be converted into and paid to the Executive in the form of shares of restricted stock) for the year in which the termination occurs, paid in a lump sum on the first payroll date following the sixtieth (60th) day following such termination; and

(iv)if the Executive elects continuation coverage under the Employer’s medical plan pursuant to COBRA, the Employer shall reimburse the Executive for the Executive’s COBRA payments until the earlier of (x) the Executive’s eligibility for any such coverage under another employer’s or any other medical plan or (y) the date that is eighteen (18) months following the termination of the Executive’s employment.  The Employer shall make any such reimbursement within thirty (30) days following receipt of evidence from the Executive of the Executive’s payment of the COBRA premium, which evidence shall be provided by the Executive within thirty (30) days of the Executive’s payment of such COBRA premium; provided, however, that any amounts due during the 60-day period following such termination shall not be paid during such 60-day period but instead shall be paid on the first payroll date after such 60-day period.  The Executive agrees that the period of coverage under such plan shall count against such plan’s obligation to provide continuation coverage pursuant to COBRA.

It is expressly understood that the Employer’s obligations under this Section 5(c) (other than payment of the Accrued Benefits) shall cease in the event the Executive breaches any of the agreements in Sections 6 and 7 of this Agreement.  Notwithstanding anything herein to the contrary, the Employer shall not be obligated to make any payments or provide any benefits  under this Section 5(c) (other than payment of the Accrued Benefits) unless (x) prior to the sixtieth (60th) day following the termination without Cause or termination for Good Reason, the Executive executes a release of all current or future claims, known or unknown, arising on or before the date of the release, against the Employer and its subsidiaries and the directors,

5

officers, employees and affiliates of any of them, in a form approved by the Employer and (y) any applicable revocation period has expired during such sixty-day period without the Executive revoking such release.  Each payment under this Section 5(c) shall be considered a separate payment and not one of a series of payments for purposes of Section 409A of the Code.  All payments under Sections 5(c)(ii), (iii) and (iv) shall be deemed severance pay and not wages.

(d)If the Executive terminates his employment for any reason other than Good Reason, the Employer will pay the Accrued Benefits, in a single lump sum within thirty (30) days of such termination.  Thereafter, the Employer will have no further obligations to the Executive under this Agreement.  The Executive may resign upon not less than sixty (60) days prior written notice to the Employer, for any reason or no reason.

6.Confidential Information; Discoveries and Inventions; Work Made for Hire.

(a)The Executive will keep in strict confidence, and will not, directly or indirectly, at any time, during or after the Executive’s employment with the Employer, disclose, furnish, disseminate, make available or, except in the course of performing the Executive’s duties of employment, use any trade secrets or confidential business and technical information of the Employer or its customers or vendors, without limitation as to when or how the Executive may have acquired such information.  Such confidential information shall include, without limitation, the Employer’s unique selling, manufacturing and servicing methods and business techniques, training, service and business manuals, promotional materials, training courses and other training and instructional materials, vendor and product information, customer and prospective customer lists, other customer and prospective customer information and other business information.  The Executive specifically acknowledges that all such confidential information, whether reduced to writing, maintained on any form of electronic media, or maintained in the mind or memory of the Executive and whether compiled by the Employer, and/or the Executive, derives independent economic value from not being readily known to or ascertainable by proper means by others who can obtain economic value from its disclosure or use, that reasonable efforts have been made by the Employer to maintain the secrecy of such information, that such information is the sole property of the Employer and that any retention and use of such information by the Executive during the Executive’s employment with the Employer (except in the course of performing the Executive’s duties and obligations to the Employer) or after the termination of the Executive’s employment shall constitute a misappropriation of the Employer’s trade secrets.

(b)The Executive agrees that upon termination of the Executive’s employment with the Employer, for any reason, the Executive shall return to the Employer, in good condition, all property of the Employer, including without limitation, the originals and all copies of any materials which contain, reflect, summarize, describe, analyze or refer or relate to any items of information listed in Section 6(a) of this Agreement.  In the event that such items are not so returned, the Employer will have the right to charge the Executive for all reasonable damages, costs, attorneys’ fees and other expenses incurred in searching for, taking, removing and/or recovering such property.

(c)The Executive agrees that upon conception and/or development of any idea, discovery, invention, improvement, software, writing or other material or design that:  (A) relates to the business of the Employer, or (B) relates to the Employer’s actual or demonstrably

6

anticipated research or development, or (C) results from any work performed by the Executive for the Employer, the Executive will assign to the Employer the entire right, title and interest in and to any such idea, discovery, invention, improvement, software, writing or other material or design.  The Executive has no obligation to assign any idea, discovery, invention, improvement, software, writing or other material or design that the Executive conceives and/or develops entirely on the Executive’s own time without using the Employer’s equipment, supplies, facilities, or trade secret information unless the idea, discovery, invention, improvement, software, writing or other material or design either:  (x) relates to the business of the Employer, or (y) relates to the Employer’s actual or demonstrably anticipated research or development, or (z) results from any work performed by the Executive for the Employer.  The Executive agrees that any idea, discovery, invention, improvement, software, writing or other material or design that relates to the business of the Employer or relates to the Employer’s actual or demonstrably anticipated research or development which is conceived or suggested by the Executive, either solely or jointly with others, within one (1) year following termination of the Executive’s employment under this Agreement or any successor agreements shall be presumed to have been so made, conceived or suggested in the course of such employment with the use of the Employer’s equipment, supplies, facilities, and/or trade secrets.

(d)In order to determine the rights of the Executive and the Employer in any idea, discovery, invention, improvement, software, writing or other material, and to insure the protection of the same, the Executive agrees that during the Executive’s employment, and for one (1) year after termination of the Executive’s employment under this Agreement or any successor agreements the Executive will disclose immediately and fully to the Employer any idea, discovery, invention, improvement, software, writing or other material or design conceived, made or developed by the Executive solely or jointly with others.  The Employer agrees to keep any such disclosures confidential.  The Executive also agrees to record descriptions of all work in the manner directed by the Employer and agrees that all such records and copies, samples and experimental materials will be the exclusive property of the Employer.  The Executive agrees that at the request of and without charge to the Employer, but at the Employer’s expense, the Executive will execute a written assignment of the idea, discovery, invention, improvement, software, writing or other material or design to the Employer and will assign to the Employer any application for letters patent or for trademark registration made thereon, and to any common-law or statutory copyright therein; and that the Executive will do whatever may be necessary or desirable to enable the Employer to secure any patent, trademark, copyright, or other property right therein in the United States and in any foreign country, and any division, renewal, continuation, or continuation in part thereof, or for any reissue of any patent issued thereon.  In the event the Employer is unable, after reasonable effort, and in any event after ten business days, to secure the Executive’s signature on a written assignment to the Employer of any application for letters patent or to any common-law or statutory copyright or other property right therein, whether because of the Executive’s physical or mental incapacity or for any other reason whatsoever, the Executive irrevocably designates and appoints the General Counsel or Corporate Secretary of the Employer as the Executive’s attorney-in-fact to act on the Executive’s behalf to execute and file any such application and to do all other lawfully permitted acts to further the prosecution and issuance of such letters patent, copyright or trademark.

(e)The Executive acknowledges that, to the extent permitted by law, all work papers, reports, documentation, drawings, photographs, negatives, tapes and masters therefor, prototypes

7

and other materials (hereinafter, “items”), including without limitation, any and all such items generated and maintained on any form of electronic media, generated by the Executive during the Executive’s employment with the Employer shall be considered a “work made for hire” and that ownership of any and all copyrights in any and all such items shall belong to the Employer.  The item will recognize the Employer as the copyright owner, will contain all proper copyright notices, e.g., “(creation date) Molycorp, Inc., All Rights Reserved,” and will be in condition to be registered or otherwise placed in compliance with registration or other statutory requirements throughout the world.

7.Non-Competition, Non-Solicitation.

(a)For the purposes of this Agreement, “Competitive Conduct” shall be determined in good faith by the Employer and shall include any of the following conduct whether direct or indirect, on the Executive’s own behalf or on behalf of, or in conjunction with, any person, partnership, corporation, company or other entity:

(i)owning, managing, operating, controlling, being employed by, participating in, engaging in, rendering any services for, assisting, having any financial interest in, permitting the Executive’s name to be used in connection with, or being connected in any manner with the ownership, management, operation, or control of any Competitor of the Employer or its affiliates.  For the purposes of this Agreement, a “Competitor” is any person or entity that engages in the production of rare earth products, including, without limitation, rare earth oxides, metals, alloys and magnets;

(ii)consulting with, acting as an agent for, or otherwise assisting any Competitor to compete or prepare to compete with the Employer or its affiliates in any of the Employer’s or its affiliate’s existing or prospective businesses or activities;

(iii)interfering with the relationship between the Employer and any current or former employee or consultant of the Employer, including, without limitation, soliciting, inducing, enticing, hiring, employing, or attempting to solicit, induce, entice, hire, or employ any current or former employee or consultant of the Employer;

(iv)interfering or attempting to interfere with any transaction in which the Employer or any of its affiliates is involved or which was pending during the term of the Executive’s engagement with the Employer or at the date on which the Executive’s engagement with the Employer ends;

(v)soliciting any of the Employer’s customers or prospective customers; and/or

(vi)soliciting, inducing, or attempting to induce any current or prospective customer, supplier or other business relation of the Employer or any of its affiliates to cease doing business with the Employer (or any subsidiary, member, parent or other affiliate of the Employer) or in any way interfering with the relationship between any such customer, supplier or business relation of the Employer or its affiliates.

8

(b)The Executive shall not engage in Competitive Conduct for a period of two (2) years after termination (whether voluntary or involuntary) of the Executive’s employment with the Employer.

(c)The Executive shall not engage in Competitive Conduct anywhere in China, Japan, the United States, the European Union or Australia.

(d)The Executive acknowledges and agrees that the restrictive covenants in this Agreement are designed and intended to protect the Employer’s trade secrets.  The Executive further agrees that the Employer operates in a world-wide, and not a local or regional, market, and the restrictive covenants in this Agreement are reasonable in duration and geographic scope and are reasonably necessary to protect the Employer’s legitimate business interests.

(e)The Executive may serve as a non-executive director of another business or company if, and only if, the Executive concludes that such service will not interfere with his duties hereunder, the Executive refers such proposed service to the Board for approval, the Board determines that such service as a director is in the best interest of the Employer and the Board authorizes the Executive’s service as a director for such business or company.

(f)The Employer acknowledges and agrees that the restrictions set forth in this Section 7 shall not limit or prohibit the Executive (i) from serving as an officer, director or consultant of another company, which may or may not be an affiliate of the Employer, as long as such service is at the request or direction of the Employer or the Board or (ii) from engaging in passive investment activities and business-related, community service, charitable and social activities that do not interfere with the Executive’s performance of his duties or his obligations hereunder.

(g)For purposes of Section 6 of this Agreement and this Section 7, the Employer shall include any and all direct and indirect subsidiary, parent, affiliated, or related companies of the Employer for which the Executive worked or had responsibility at the time of termination of his employment and at any time during the two (2) year period prior to such termination.

(h)If it shall be judicially determined that the Executive has violated Section 7(b) of this Agreement, then the period applicable to each obligation that the Executive shall have been determined to have violated shall automatically be extended by a period of time equal in length to the period during which such violation(s) occurred.

8.Communication of Contents of Agreement.  While employed by the Employer and for two (2) years thereafter, the Executive will communicate the contents of Sections 6 and 7 of this Agreement to any person, firm, association, partnership, corporation or other entity that the Executive intends to be employed by, associated with, or represent.

9.No Conflicts.  The Executive represents and warrants that the Executive is not presently subject to any agreement with a Competitor or potential Competitor of the Employer, or to any other contract, oral or written, that could restrict or prevent the Executive from entering into this Agreement or performing his duties in full accord with this Agreement.

9

10.Executive Representations and Warranties.  The Executive hereby represents and warrants to the Employer that:

(a)the execution, delivery and performance of this Agreement by the Executive does not and will not conflict with, breach, violate or cause a default under any agreement, contract or instrument to which the Executive is a party, or any judgment, order or decree to which the Executive is subject;

(b)the Executive is not a party to or bound by any employment agreement, other than the Prior Agreement, consulting agreement, non-compete agreement, confidentiality agreement, non-disclosure agreement or similar agreement with any other person or entity;

(c)the Executive has read through the entirety of this Agreement, and prior to signing it, the Executive has been advised by independent legal counsel;

(d)upon the execution and delivery of this Agreement by the Employer and the Executive, this Agreement will be a valid and binding obligation of the Executive, enforceable in accordance with its terms; and

(e)the Executive has been paid or provided all wages, compensation, bonuses, stock, stock options, vacation, or other benefits due to the Executive under the terms of the Prior Agreement.

11.Acknowledgments.  The Executive acknowledges that the covenants contained in Sections 6 and 7, including those related to duration, geographic scope, and the scope of prohibited conduct, are reasonable and necessary to protect the legitimate interests of the Employer.  The Executive acknowledges that the Executive is an executive and management level employee as referenced in, and governed by, C.R.S. 8-2-113(2)(d).  The Executive further acknowledges that the covenants contained in Sections 6 and 7 are necessary to protect, and reasonably related to the protection of, the Employer’s trade secrets, to which the Executive will be exposed and with which the Executive will be entrusted.

12.Equitable Remedies.  The services to be rendered by the Executive and the Confidential Information entrusted to the Executive as a result of the Executive’s employment by the Employer are of a unique and special character, and any breach of Sections 6 and 7 will cause the Employer immediate and irreparable injury and damage, for which monetary relief would be inadequate or difficult to quantify.  The Employer will be entitled to, in addition to all other remedies available to it, injunctive relief and specific performance to prevent a breach and to secure the enforcement of Sections 6 and 7.  Injunctive relief may be granted immediately upon the commencement of any such action.

13.Taxes.  The Employer may withhold from any amounts payable under this Agreement all federal, state, city or other taxes as the Employer is required to withhold pursuant to any applicable law, regulation or ruling.  Notwithstanding any other provision of this Agreement, the Employer shall not be obligated to guarantee any particular tax result for the Executive with respect to any payment provided to the Executive hereunder, and the Executive shall be responsible for any taxes imposed on the Executive with respect to any such payment.

10

14.Section 280G.  Notwithstanding any provision of this Agreement to the contrary, if any payment or benefit to be paid or provided hereunder would be a “Parachute Payment”, within the meaning of Section 280G of the Code, but for the application of this sentence, then the payments and benefits to be paid or provided hereunder shall be reduced to the minimum extent necessary (but in no event to less than zero) so that no portion of any such payment or benefit, as so reduced, constitutes a Parachute Payment; provided, however, that the foregoing reduction shall be made only if and to the extent that such reduction would result in an increase in the aggregate payments and benefits to be provided to the Executive, determined on an after-tax basis (taking into account the excise tax imposed pursuant to Section 4999 of the Code, or any successor provision thereto, any tax imposed by any comparable provision of state law, and any applicable federal, state and local income taxes).  Any determinations required to be made under this Section 14 shall be made by the Employer’s independent accountants, which shall provide detailed supporting calculations both to the Employer and the Executive within 15 business days of the date of termination or such earlier time as is requested by the Employer, and shall be made at the expense of the Employer.  The fact that the Executive’s right to payments or benefits may be reduced by reason of the limitations contained in this Section 14 shall not of itself limit or otherwise affect any other rights of the Executive under this Agreement.  The reduction of the payments and benefits shall occur in the following order: (a) the payments that are payable in cash that are valued at full value under Treasury Regulation Section 1.280G-1, Q&A 24(a) shall be reduced (if necessary, to zero), with amounts that are payable last reduced first; (b) the payments that are payable in cash that are valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24, with amounts that are payable last reduced first, shall next be reduced; and (c) all non-cash benefits shall be next reduced pro-rata.

15.Section 409A.

(a)To the extent applicable, it is intended that this Agreement comply with the provisions of Section 409A of the Code, so that the income inclusion provisions of Section 409A(a)(1) of the Code do not apply to the Executive.  This Agreement shall be administered and interpreted in a manner consistent with this intent.  Consistent with that intent, and to the extent required under Section 409A of the Code, for benefits that are to be paid in connection with a termination of employment, “termination of employment” shall be limited to such a termination that constitutes a “separation from service” under Section 409A of the Code.

(b)Notwithstanding any provision of this Agreement to the contrary, if the Executive is a “specified employee” determined pursuant to procedures adopted by the Employer in compliance with Section  409A of the Code, on the date of his separation from service (within the meaning of Treasury Regulation section 1.409A-1(h)) and if any portion of the payments or benefits to be received by the Executive upon his termination of employment would constitute a “deferral of compensation” subject to Section 409A of the Code, then to the extent necessary to comply with Section 409A of the Code, amounts that would otherwise be payable pursuant to this Agreement during the six-month period immediately following the Executive’s termination of employment will instead be paid or made available on the earlier of (i) the first business day of the seventh month after the date of the Executive’s termination of employment, or (ii) the Executive’s death.  For purposes of application of Section 409A of the Code, to the extent applicable, each payment made under this Agreement shall be treated as a separate payment.

11

(c)Notwithstanding any provision of this Agreement to the contrary, to the extent any reimbursement or in-kind benefit provided under this Agreement is nonqualified deferred compensation within the meaning of Section 409A of the Code: (i) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year; (ii) the reimbursement of an eligible expense must be made on or before the last day of the calendar year following the calendar year in which the expense was incurred; and (iii) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

16.Prevailing Party’s Litigation Expenses.  In the event of litigation between the Employer and the Executive related to this Agreement, the non-prevailing party shall reimburse the prevailing party for any costs and expenses (including, without limitation, attorneys’ fees) reasonably incurred by the prevailing party in connection therewith.

17.Entire Agreement; Amendments.  This Agreement constitutes the entire understanding between the Parties with respect to the subject matter and supersedes, terminates, and replaces any prior or contemporaneous understandings or agreements, including but not limited to, the Prior Agreement, which is superseded by this Agreement and is of no further force or effect.  This Agreement may be amended, supplemented, waived, or terminated only by a written instrument duly executed by the Parties.

18.Headings.  The headings in this Agreement are for convenience of reference only and shall not affect its interpretation.

19.Severability.  The covenants in this Agreement shall be construed as independent of one another, and as obligations distinct from one another and any other contract between the Executive and the Employer.  If any provision of this Agreement is held illegal, invalid, or unenforceable, such illegality, invalidity, or unenforceability shall not affect any other provisions hereof.  It is the intention of the Parties that in the event any provision is held illegal, invalid or unenforceable, that such provision be limited so as to effect the intent of the Parties to the fullest extent permitted by applicable law.  Any claim by the Executive against the Employer shall not constitute a defense to enforcement by the Employer of this Agreement.

20.Survival.  The provisions of Sections 6 and 7 are independent of, and survive after the termination of, the other portions of this Agreement.

21.Notices.  All notices, demands, waivers, consents, approvals, or other communications required hereunder shall be in writing and shall be deemed to have been given if delivered personally, if sent by telegram, telex or facsimile with confirmation of receipt, if sent by certified or registered mail, postage prepaid, return receipt requested, or if sent by same day or overnight courier service to the following addresses:

If to the Employer, to:

Molycorp, Inc.

5619 Denver Tech Center Parkway

Suite 1000

12

Greenwood Village, Colorado  80111

Tel:  303-843-8040

Fax:  303-843-8082

If to the Executive, to:

Douglas J. Jackson

c/o Molycorp, Inc.

5619 Denver Tech Center Parkway

Suite 1000

Greenwood Village, Colorado  80111

Tel:  303-843-8040

Fax:  303-843-8082

Notice of any change in any such address shall also be given in the manner set forth above.  Whenever the giving of notice is required, the giving of such notice may be waived by the Party entitled to receive such notice.

22.Waiver.  The failure of any Party to insist upon strict performance of any of the terms or conditions of this Agreement shall not constitute a waiver of any of such Party’s rights hereunder.

23.Assignment.  Other than as provided below, neither Party may assign any rights or delegate any of obligations hereunder without the prior written consent of the other Party, and such purported assignment or delegation shall be void; provided that the Employer may assign the Agreement to any entity that purchases the stock or assets of the Employer or any affiliate.  This Agreement binds, inures to the benefit of, and is enforceable by the successors and permitted assigns of the Parties and does not confer any rights on any other persons or entities.

24.Governing Law.  This agreement shall be construed and enforced in accordance with Colorado law, except for any Colorado conflict-of-law principle that might require the application of the laws of another jurisdiction.

25.Choice of Forum.  Any dispute arising from or relating to this Agreement shall be resolved in the District Court for the City and County of Denver or in the United States District Court for the District of Colorado.

[Signature Page Follows]

13

IN WITNESS WHEREOF, the Parties have executed this Agreement on the dates below:

EMPLOYER:		EXECUTIVE:
MOLYCORP, INC.
By:	/s/ Mark A. Smith	/s/ Douglas J. Jackson
Name:	Mark A. Smith	Name:  Douglas J. Jackson
Title:	Chief Executive Officer	Date:    February 28, 2012
Date:	February 28, 2012

14

Exhibit A

For purposes of this Agreement:

1.“Change of Control” means the occurrence of any of the following events:

i)the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of voting securities of the Employer where such acquisition causes such Person to own more than 50% of the combined voting power of the then outstanding voting securities of the Employer entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (i), the following acquisitions shall not be deemed to result in a Change of Control:  (A) any acquisition directly from the Employer that is approved by the Incumbent Board (as defined in subsection (ii) below), (B) any acquisition by the Employer, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Employer or any corporation controlled by the Employer or (D) any acquisition by any corporation pursuant to a transaction that complies with clauses (A), (B) and (C) of subsection (iii) below; provided, further, that if any Person’s beneficial ownership of the Outstanding Company Voting Securities exceeds 50% as a result of a transaction described in clause (A) or (B) above, and such Person subsequently acquires beneficial ownership of additional voting securities of the Employer, such subsequent acquisition shall be treated as an acquisition that causes such Person to own more than 50% of the Outstanding Company Voting Securities; and provided, further, that if at least a majority of the members of the Incumbent Board determines in good faith that a Person has acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than 50% of the Outstanding Company Voting Securities inadvertently, and such Person divests as promptly as practicable a sufficient number of shares so that such Person beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act) less than or equal to 50% of the Outstanding Company Voting Securities, then no Change of Control shall have occurred as a result of such Person’s acquisition;

ii)individuals who, as of September 30, 2010, constituted the Board (the “Incumbent Board” as modified by this subsection (ii)) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to September 30, 2010 whose election, or nomination for election by the Employer’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (either by specific vote or by approval of the proxy statement of the Employer in which such person is named as a nominee for

director, without objection to such nomination) shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;

iii)the consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Employer or the acquisition of assets of another corporation or other transaction (“Business Combination”) excluding, however, such a Business Combination pursuant to which (A) the individuals and entities who were the beneficial owners of the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity that as a result of such transaction owns the Employer or all or substantially all of the Employer’s assets either directly or through one or more subsidiaries), (B) no Person (excluding any employee benefit plan (or related trust) of the Employer, the Employer or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, more than 50% of the combined voting power of the then outstanding securities entitled to vote generally in the election of directors of the entity resulting from such Business Combination and (C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

iv)approval by the stockholders of the Employer of a complete liquidation or dissolution of the Employer except pursuant to a Business Combination that complies with clauses (A), (B) and (C) of subsection (iii) above.

2.“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended and in effect from time to time, and any successor statute.

16

EX-10.9

Exhibit 10.9

AMENDED AND RESTATED

EXECUTIVE EMPLOYMENT AGREEMENT

This Amended and Restated Executive Employment Agreement (this “Agreement”) is made this 28th day of February, 2012 (the “Effective Date”), by and between MOLYCORP, INC., a Delaware corporation (the “Employer”), and JOHN K. BASSETT (the “Executive”).  The Employer and the Executive are referred to below individually as a “Party” and collectively as the “Parties.”

WITNESSETH:

WHEREAS, the Employer and the Executive are currently parties to an Executive Employment Agreement, dated January 24, 2011 (the “Prior Agreement”);

WHEREAS, this Agreement will supersede and completely replace the Prior Agreement as of the Effective Date;

WHEREAS, the Executive agrees to be employed by the Employer upon and subject to the terms herein provided; and

WHEREAS, the Employer agrees to employ the Executive upon and subject to the terms herein provided.

NOW, THEREFORE, in consideration of the foregoing and of the mutual promises, covenants and agreements contained herein, the legal sufficiency of which is acknowledged by the Parties, and intending to be legally bound, the Parties agree as follows:

1.Employment.  The Employer shall employ the Executive, and the Executive accepts continued employment with the Employer, upon the terms and conditions set forth in this Agreement for a period of time beginning on the date hereof and ending as provided in Section 4 (the “Employment Period”).  Notwithstanding anything in this Agreement to the contrary, the Executive will be an at-will employee of the Employer and the Executive or the Employer may terminate the Executive’s employment with the Employer for any reason or no reason at any time.

2.Office and Duties.  The Executive shall serve as, and have the title of, Senior Vice President, Operations and shall report to, and be subject to the power and authority of, the Chief Executive Officer of the Employer.  The Executive shall manage the affairs of the Employer and have the duties, responsibilities and authority of a Senior Vice President, Operations.  The Executive shall perform such tasks commensurate with this position as may from time to time be defined or assigned by the Chief Executive Officer of the Employer.  The Executive shall devote all business time, labor, skill, undivided attention and best ability to the performance of the Executive’s duties hereunder in a manner which will faithfully and diligently further the business and interests of the Employer.  During the Employment Period, the Executive shall not directly or indirectly pursue any other business activity without the prior written consent of the Board of Directors of the Employer (the “Board”), except as permitted under Section 7(f) of this

Agreement.  The Executive further agrees to travel to whatever extent is reasonably necessary in the conduct of the Employer’s business, at the Employer’s expense.

3.Compensation and Benefits.

(a)The Employer will pay the Executive a base salary for services rendered under this Agreement at a rate of not less than $325,000.00 per year, payable in accordance with Employer’s standard payroll practices, subject to such payroll and withholding deductions as are required by law or authorized by the Executive.  The Executive shall be eligible for increases in base salary at the sole discretion of the Employer.  The base salary rate in effect for the Executive from time to time pursuant to this Section 3(a) is referred to herein as the Executive’s “Base Salary”.

(b)The Executive shall be entitled to participate in the employee benefit plans (such as medical and dental insurance, disability, life insurance, 401k and sick pay) offered to substantially all of the employees of the Employer.  In addition, the Executive will be eligible for the Employer’s Amended and Restated Management Incentive Compensation Plan (the “MICP”), which is a nonqualified deferred compensation plan to which the Employer may make contributions and the Executive may elect to make deferral contributions from his base salary and bonus, if any.  Employer contributions to the MICP are discretionary and subject to annual Board approval.

(c)The Executive shall be eligible for such bonus plans and long-term equity or cash incentive compensation plans for the Employer’s officers and directors as the Board may establish from time to time, which will be based on the achievement and satisfaction of goals and objectives established by the Board.

(d)The Employer shall reimburse the Executive for all reasonable and actual out-of-pocket costs and expenses, including reasonable business entertainment and travel expenses (including reasonable expenses for Executive’s travel to and from his primary residence in Illinois to Employer’s location or other locations in the conduct of Employer’s business), incurred by him in the course of performing his duties under this Agreement, subject in all instances to the Employer’s reimbursement policies and requirements applicable to all employees with respect to reporting and documentation of such expenses, including, without limitation, the timely submittal of receipts, invoices and documentation supporting all such costs and expenses.

(e)The Executive shall be entitled to vacation in accordance with the Company’s plans, policies, programs and practices as in effect from time to time.  The Executive will keep the Board apprised of dates for planned vacation.

4.Employment Period.  The Employment Period shall be for the period beginning on the date of this Agreement and ending on January 1, 2014.  On January 1, 2014, and on each succeeding anniversary of such date, the Employment Period shall be extended for an additional year, unless the Employer or the Executive shall have given the other ninety (90) days written notice, prior to January 1, 2014 or any succeeding anniversary commencing after January 1, 2014, that the Employment Period will not be extended.  Notwithstanding the foregoing, (i) the

2

Employment Period shall terminate prior to any such date upon the Executive’s resignation, death or disability and (ii) the Employment Period may be terminated by the Employer at any time prior to any such date for Cause (as defined below) or without Cause.

5.Termination of Employment.

(a)If the Employer terminates the Executive’s employment as a result of the Executive’s death or the Executive’s disability or for Cause (as defined below), the Employer will pay the Executive’s accrued salary, benefits and vacation, including the then unused accrued vacation, up to and including the date of termination (the “Accrued Benefits”), in a single lump sum within thirty (30) days of such termination.  Thereafter, the Employer will have no further obligations to the Executive under this Agreement.

For purposes of this Agreement, “Cause” is defined as:  (1) the Executive’s misconduct, malfeasance, or negligence relative to the Executive’s duties or the Employer’s business; (2) the Executive’s failure or refusal to perform the services required or as requested by the Chief Executive Officer of the Employer, or the Executive’s refusal to carry out or perform proper directions or instructions from the Employer or the Chief Executive Officer of the Employer with respect to the services rendered hereunder; (3) the Executive’s conviction of a crime that either results in a sentence of imprisonment or involves theft, embezzlement, dishonesty or breach of securities or financial laws or regulations; (4) activities by the Executive that are injurious to the Employer, its affiliates or its or their reputation; or (5) any conduct constituting “cause” under applicable law.  Whether Cause exists to justify the termination of this Agreement shall be determined by the Employer in its sole discretion.

(b)If the Employer terminates the Executive’s employment without Cause or if the Executive terminates his employment for Good Reason (as defined below), and such termination does not occur within the twenty-four (24) month period following a Change of Control:

(i)the Employer will pay to the Executive the Accrued Benefits, in a single lump sum within thirty (30) days of such termination;

(ii)the Employer shall continue to pay the Executive his Base Salary at the time of such termination for a period of one (1) year following such termination pursuant to the Employer’s standard pay periods and practices; provided, however, that Base Salary amounts due during the 60-day period following such termination shall not be paid during such 60-day period but instead shall be paid on the first payroll date after such 60-day period;

(iii)the Employer shall pay to the Executive one (1) times the Executive’s target bonus amount under the Employer’s annual incentive plan (which, for the avoidance of doubt, shall include any portion of such bonus amount that may be converted into and paid to the Executive in the form of shares of restricted stock) for the year in which the termination occurs, in a single lump sum on the first payroll date following the sixtieth (60th) day following such termination; and

(iv)if the Executive elects continuation coverage under the Employer’s medical plan pursuant to Part 6 of Subtitle B of Title I of the Employee Retirement

3

Income Security Act of 1974, as amended (“COBRA”), the Employer shall reimburse the Executive for the Executive’s COBRA payments until the earlier of (x) the Executive’s eligibility for any such coverage under another employer’s or any other medical plan or (y) the date that is twelve (12) months following the termination of the Executive’s employment.  The Employer shall make any such reimbursement within thirty (30) days following receipt of evidence from the Executive of the Executive’s payment of the COBRA premium, which evidence shall be provided by the Executive within thirty (30) days of the Executive’s payment of such COBRA premium; provided, however, that any amounts due during the 60-day period following such termination shall not be paid during such 60-day period but instead shall be paid on the first payroll date after such 60-day period.  The Executive agrees that the period of coverage under such plan shall count against such plan’s obligation to provide continuation coverage pursuant to COBRA.

It is expressly understood that the Employer’s obligations under this Section 5(b) (other than payment of the Accrued Benefits) shall cease in the event the Executive breaches any of the agreements in Sections 6 and 7 of this Agreement.  Notwithstanding anything herein to the contrary, the Employer shall not be obligated to make any payments or provide any benefit under this Section 5(b) (other than payment of the Accrued Benefits) unless (x) prior to the sixtieth (60th) day following the termination without Cause or termination for Good Reason, the Executive executes a release of all current or future claims, known or unknown, arising on or before the date of the release, against the Employer and its subsidiaries and the directors, officers, employees and affiliates of any of them, in a form approved by the Employer and (y) any applicable revocation period has expired during such sixty-day period without the Executive revoking such release.  Each payment under this Section 5(b) shall be considered a separate payment and not one of a series of payments for purposes of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).  All payments under Sections 5(b)(ii), (iii) and (iv) shall be deemed severance pay and not wages.

For purposes of this Agreement, “Good Reason” is defined as: the Executive’s termination of his employment with the Employer as a result of (i) any material diminution in the Executive’s authority, duties or responsibilities, (ii) a relocation of the Executive’s principal office to a location that is in excess of fifty (50) miles from its location as of the Effective Date or (iii) any material decrease in the amount of the Executive’s Base Salary. Notwithstanding the foregoing, no termination of employment by the Executive shall constitute a termination for “Good Reason” unless (A) the Executive gives the Employer notice of the existence of an event described in clause (i), (ii) or (iii) above within sixty (60) days following the occurrence thereof, (B) the Employer does not remedy such event within thirty (30) days of receiving the notice described in the preceding clause (A), and (C) the Executive terminates employment within five (5) days of the end of the cure period specified in clause (B), above.

(c)If, during the twenty-four (24) month period following a Change of Control, the Employer terminates the Executive’s employment without Cause or the Executive terminates his employment for Good Reason:

(i)the Employer will pay to the Executive the Accrued Benefits, in a single lump sum within thirty (30) days of such termination;

4

(ii)if (A) the Change of Control constitutes a “change in the ownership or effective control of the Employer, or a change in the ownership of a substantial portion of the assets of the Employer,” within the meaning of Section 409A of the Code and the regulations thereunder (a “409A Change in Control”), the Employer shall make a lump sum payment to the Executive in an amount equal to two (2) times his Base Salary at the time of such termination, paid in a lump sum on the first payroll date following the sixtieth (60th) day following such termination; or (B) the Change of Control does not constitute a 409A Change in Control, the Employer shall (I) make a lump sum payment to the Executive in an amount equal to one (1) times his Base Salary at the time of such termination, paid in a lump sum on the first payroll date following the sixtieth (60th) day following such termination, and (II) continue to pay the Executive his Base Salary at the time of such termination for a period of one (1) year following such termination pursuant to the Employer’s standard pay periods and practices; provided, however, that Base Salary amounts due during the 60-day period following such termination shall not be paid during such 60-day period but instead shall be paid on the first payroll date after such 60-day period;

(iii)the Employer shall make a lump sum payment to the Executive in an amount equal to two (2) times the Executive’s target bonus amount under the Employer’s annual incentive plan (which, for the avoidance of doubt, shall include any portion of such bonus amount that may be converted into and paid to the Executive in the form of shares of restricted stock) for the year in which the termination occurs, paid in a lump sum on the first payroll date following the sixtieth (60th) day following such termination; and

(iv)if the Executive elects continuation coverage under the Employer’s medical plan pursuant to COBRA, the Employer shall reimburse the Executive for the Executive’s COBRA payments until the earlier of (x) the Executive’s eligibility for any such coverage under another employer’s or any other medical plan or (y) the date that is eighteen (18) months following the termination of the Executive’s employment.  The Employer shall make any such reimbursement within thirty (30) days following receipt of evidence from the Executive of the Executive’s payment of the COBRA premium, which evidence shall be provided by the Executive within thirty (30) days of the Executive’s payment of such COBRA premium; provided, however, that any amounts due during the 60-day period following such termination shall not be paid during such 60-day period but instead shall be paid on the first payroll date after such 60-day period.  The Executive agrees that the period of coverage under such plan shall count against such plan’s obligation to provide continuation coverage pursuant to COBRA.

It is expressly understood that the Employer’s obligations under this Section 5(c) (other than payment of the Accrued Benefits) shall cease in the event the Executive breaches any of the agreements in Sections 6 and 7 of this Agreement.  Notwithstanding anything herein to the contrary, the Employer shall not be obligated to make any payments or provide any benefits  under this Section 5(c) (other than payment of the Accrued Benefits) unless (x) prior to the sixtieth (60th) day following the termination without Cause or termination for Good Reason, the Executive executes a release of all current or future claims, known or unknown, arising on or before the date of the release, against the Employer and its subsidiaries and the directors,

5

officers, employees and affiliates of any of them, in a form approved by the Employer and (y) any applicable revocation period has expired during such sixty-day period without the Executive revoking such release.  Each payment under this Section 5(c) shall be considered a separate payment and not one of a series of payments for purposes of Section 409A of the Code.  All payments under Sections 5(c)(ii), (iii) and (iv) shall be deemed severance pay and not wages.

(d)If the Executive terminates his employment for any reason other than Good Reason, the Employer will pay the Accrued Benefits, in a single lump sum within thirty (30) days of such termination.  Thereafter, the Employer will have no further obligations to the Executive under this Agreement.  The Executive may resign upon not less than sixty (60) days prior written notice to the Employer, for any reason or no reason.

6.Confidential Information; Discoveries and Inventions; Work Made for Hire.

(a)The Executive will keep in strict confidence, and will not, directly or indirectly, at any time, during or after the Executive’s employment with the Employer, disclose, furnish, disseminate, make available or, except in the course of performing the Executive’s duties of employment, use any trade secrets or confidential business and technical information of the Employer or its customers or vendors, without limitation as to when or how the Executive may have acquired such information.  Such confidential information shall include, without limitation, the Employer’s unique selling, manufacturing and servicing methods and business techniques, training, service and business manuals, promotional materials, training courses and other training and instructional materials, vendor and product information, customer and prospective customer lists, other customer and prospective customer information and other business information.  The Executive specifically acknowledges that all such confidential information, whether reduced to writing, maintained on any form of electronic media, or maintained in the mind or memory of the Executive and whether compiled by the Employer, and/or the Executive, derives independent economic value from not being readily known to or ascertainable by proper means by others who can obtain economic value from its disclosure or use, that reasonable efforts have been made by the Employer to maintain the secrecy of such information, that such information is the sole property of the Employer and that any retention and use of such information by the Executive during the Executive’s employment with the Employer (except in the course of performing the Executive’s duties and obligations to the Employer) or after the termination of the Executive’s employment shall constitute a misappropriation of the Employer’s trade secrets.

(b)The Executive agrees that upon termination of the Executive’s employment with the Employer, for any reason, the Executive shall return to the Employer, in good condition, all property of the Employer, including without limitation, the originals and all copies of any materials which contain, reflect, summarize, describe, analyze or refer or relate to any items of information listed in Section 6(a) of this Agreement.  In the event that such items are not so returned, the Employer will have the right to charge the Executive for all reasonable damages, costs, attorneys’ fees and other expenses incurred in searching for, taking, removing and/or recovering such property.

(c)The Executive agrees that upon conception and/or development of any idea, discovery, invention, improvement, software, writing or other material or design that:  (A) relates to the business of the Employer, or (B) relates to the Employer’s actual or demonstrably

6

anticipated research or development, or (C) results from any work performed by the Executive for the Employer, the Executive will assign to the Employer the entire right, title and interest in and to any such idea, discovery, invention, improvement, software, writing or other material or design.  The Executive has no obligation to assign any idea, discovery, invention, improvement, software, writing or other material or design that the Executive conceives and/or develops entirely on the Executive’s own time without using the Employer’s equipment, supplies, facilities, or trade secret information unless the idea, discovery, invention, improvement, software, writing or other material or design either:  (x) relates to the business of the Employer, or (y) relates to the Employer’s actual or demonstrably anticipated research or development, or (z) results from any work performed by the Executive for the Employer.  The Executive agrees that any idea, discovery, invention, improvement, software, writing or other material or design that relates to the business of the Employer or relates to the Employer’s actual or demonstrably anticipated research or development which is conceived or suggested by the Executive, either solely or jointly with others, within one (1) year following termination of the Executive’s employment under this Agreement or any successor agreements shall be presumed to have been so made, conceived or suggested in the course of such employment with the use of the Employer’s equipment, supplies, facilities, and/or trade secrets.

(d)In order to determine the rights of the Executive and the Employer in any idea, discovery, invention, improvement, software, writing or other material, and to insure the protection of the same, the Executive agrees that during the Executive’s employment, and for one (1) year after termination of the Executive’s employment under this Agreement or any successor agreements the Executive will disclose immediately and fully to the Employer any idea, discovery, invention, improvement, software, writing or other material or design conceived, made or developed by the Executive solely or jointly with others.  The Employer agrees to keep any such disclosures confidential.  The Executive also agrees to record descriptions of all work in the manner directed by the Employer and agrees that all such records and copies, samples and experimental materials will be the exclusive property of the Employer.  The Executive agrees that at the request of and without charge to the Employer, but at the Employer’s expense, the Executive will execute a written assignment of the idea, discovery, invention, improvement, software, writing or other material or design to the Employer and will assign to the Employer any application for letters patent or for trademark registration made thereon, and to any common-law or statutory copyright therein; and that the Executive will do whatever may be necessary or desirable to enable the Employer to secure any patent, trademark, copyright, or other property right therein in the United States and in any foreign country, and any division, renewal, continuation, or continuation in part thereof, or for any reissue of any patent issued thereon.  In the event the Employer is unable, after reasonable effort, and in any event after ten business days, to secure the Executive’s signature on a written assignment to the Employer of any application for letters patent or to any common-law or statutory copyright or other property right therein, whether because of the Executive’s physical or mental incapacity or for any other reason whatsoever, the Executive irrevocably designates and appoints the General Counsel or Corporate Secretary of the Employer as the Executive’s attorney-in-fact to act on the Executive’s behalf to execute and file any such application and to do all other lawfully permitted acts to further the prosecution and issuance of such letters patent, copyright or trademark.

(e)The Executive acknowledges that, to the extent permitted by law, all work papers, reports, documentation, drawings, photographs, negatives, tapes and masters therefor, prototypes

7

and other materials (hereinafter, “items”), including without limitation, any and all such items generated and maintained on any form of electronic media, generated by the Executive during the Executive’s employment with the Employer shall be considered a “work made for hire” and that ownership of any and all copyrights in any and all such items shall belong to the Employer.  The item will recognize the Employer as the copyright owner, will contain all proper copyright notices, e.g., “(creation date) Molycorp, Inc., All Rights Reserved,” and will be in condition to be registered or otherwise placed in compliance with registration or other statutory requirements throughout the world.

7.Non-Competition, Non-Solicitation.

(a)For the purposes of this Agreement, “Competitive Conduct” shall be determined in good faith by the Employer and shall include any of the following conduct whether direct or indirect, on the Executive’s own behalf or on behalf of, or in conjunction with, any person, partnership, corporation, company or other entity:

(i)owning, managing, operating, controlling, being employed by, participating in, engaging in, rendering any services for, assisting, having any financial interest in, permitting the Executive’s name to be used in connection with, or being connected in any manner with the ownership, management, operation, or control of any Competitor of the Employer or its affiliates.  For the purposes of this Agreement, a “Competitor” is any person or entity that engages in the production of rare earth products, including, without limitation, rare earth oxides, metals, alloys and magnets;

(ii)consulting with, acting as an agent for, or otherwise assisting any Competitor to compete or prepare to compete with the Employer or its affiliates in any of the Employer’s or its affiliate’s existing or prospective businesses or activities;

(iii)interfering with the relationship between the Employer and any current or former employee or consultant of the Employer, including, without limitation, soliciting, inducing, enticing, hiring, employing, or attempting to solicit, induce, entice, hire, or employ any current or former employee or consultant of the Employer;

(iv)interfering or attempting to interfere with any transaction in which the Employer or any of its affiliates is involved or which was pending during the term of the Executive’s engagement with the Employer or at the date on which the Executive’s engagement with the Employer ends;

(v)soliciting any of the Employer’s customers or prospective customers; and/or

(vi)soliciting, inducing, or attempting to induce any current or prospective customer, supplier or other business relation of the Employer or any of its affiliates to cease doing business with the Employer (or any subsidiary, member, parent or other affiliate of the Employer) or in any way interfering with the relationship between any such customer, supplier or business relation of the Employer or its affiliates.

8

(b)The Executive shall not engage in Competitive Conduct for a period of two (2) years after termination (whether voluntary or involuntary) of the Executive’s employment with the Employer.

(c)The Executive shall not engage in Competitive Conduct anywhere in China, Japan, the United States, the European Union or Australia.

(d)The Executive acknowledges and agrees that the restrictive covenants in this Agreement are designed and intended to protect the Employer’s trade secrets.  The Executive further agrees that the Employer operates in a world-wide, and not a local or regional, market, and the restrictive covenants in this Agreement are reasonable in duration and geographic scope and are reasonably necessary to protect the Employer’s legitimate business interests.

(e)The Executive may serve as a non-executive director of another business or company if, and only if, the Executive concludes that such service will not interfere with his duties hereunder, the Executive refers such proposed service to the Board for approval, the Board determines that such service as a director is in the best interest of the Employer and the Board authorizes the Executive’s service as a director for such business or company.

(f)The Employer acknowledges and agrees that the restrictions set forth in this Section 7 shall not limit or prohibit the Executive (i) from serving as an officer, director or consultant of another company, which may or may not be an affiliate of the  Employer, as long as such service is at the request or direction of the Employer or the Board or (ii) from engaging in passive investment activities and business-related, community service, charitable and social activities that do not interfere with the Executive’s performance of his duties or his obligations hereunder.

(g)For purposes of Section 6 of this Agreement and this Section 7, the Employer shall include any and all direct and indirect subsidiary, parent, affiliated, or related companies of the Employer for which the Executive worked or had responsibility at the time of termination of his employment and at any time during the two (2) year period prior to such termination.

(h)If it shall be judicially determined that the Executive has violated Section 7(b) of this Agreement, then the period applicable to each obligation that the Executive shall have been determined to have violated shall automatically be extended by a period of time equal in length to the period during which such violation(s) occurred.

8.Communication of Contents of Agreement.  While employed by the Employer and for two (2) years thereafter, the Executive will communicate the contents of Sections 6 and 7 of this Agreement to any person, firm, association, partnership, corporation or other entity that the Executive intends to be employed by, associated with, or represent.

9.No Conflicts.  The Executive represents and warrants that the Executive is not presently subject to any agreement with a Competitor or potential Competitor of the Employer, or to any other contract, oral or written, that could restrict or prevent the Executive from entering into this Agreement or performing his duties in full accord with this Agreement.

9

10.Executive Representations and Warranties.  The Executive hereby represents and warrants to the Employer that:

(a)the execution, delivery and performance of this Agreement by the Executive does not and will not conflict with, breach, violate or cause a default under any agreement, contract or instrument to which the Executive is a party, or any judgment, order or decree to which the Executive is subject;

(b)the Executive is not a party to or bound by any employment agreement, other than the Prior Agreement, consulting agreement, non-compete agreement, confidentiality agreement, non-disclosure agreement or similar agreement with any other person or entity, except for a non-compete agreement between the Executive and Seadrift Coke L.P., a Delaware limited partnership, which will not be breached or violated by Executive’s entry into and performance of this Agreement and a copy of which has been provided by the Executive to the Employer;

(c)the Executive has read through the entirety of this Agreement, and prior to signing it, the Executive has been advised by independent legal counsel;

(d)upon the execution and delivery of this Agreement by the Employer and the Executive, this Agreement will be a valid and binding obligation of the Executive, enforceable in accordance with its terms; and

(e)the Executive has been paid or provided all wages, compensation, bonuses, stock, stock options, vacation, or other benefits due to the Executive under the terms of the Prior Agreement.

11.Acknowledgments.  The Executive acknowledges that the covenants contained in Sections 6 and 7, including those related to duration, geographic scope, and the scope of prohibited conduct, are reasonable and necessary to protect the legitimate interests of the Employer.  The Executive acknowledges that the Executive is an executive and management level employee as referenced in, and governed by, C.R.S. 8-2-113(2)(d).  The Executive further acknowledges that the covenants contained in Sections 6 and 7 are necessary to protect, and reasonably related to the protection of, the Employer’s trade secrets, to which the Executive will be exposed and with which the Executive will be entrusted.

12.Equitable Remedies.  The services to be rendered by the Executive and the Confidential Information entrusted to the Executive as a result of the Executive’s employment by the Employer are of a unique and special character, and any breach of Sections 6 and 7 will cause the Employer immediate and irreparable injury and damage, for which monetary relief would be inadequate or difficult to quantify.  The Employer will be entitled to, in addition to all other remedies available to it, injunctive relief and specific performance to prevent a breach and to secure the enforcement of Sections 6 and 7.  Injunctive relief may be granted immediately upon the commencement of any such action.

13.Taxes.  The Employer may withhold from any amounts payable under this Agreement all federal, state, city or other taxes as the Employer is required to withhold pursuant to any applicable law, regulation or ruling.  Notwithstanding any other provision of this Agreement, the Employer shall not be obligated to guarantee any particular tax result for the

10

Executive with respect to any payment provided to the Executive hereunder, and the Executive shall be responsible for any taxes imposed on the Executive with respect to any such payment.

14.Section 280G.  Notwithstanding any provision of this Agreement to the contrary, if any payment or benefit to be paid or provided hereunder would be a “Parachute Payment”, within the meaning of Section 280G of the Code, but for the application of this sentence, then the payments and benefits to be paid or provided hereunder shall be reduced to the minimum extent necessary (but in no event to less than zero) so that no portion of any such payment or benefit, as so reduced, constitutes a Parachute Payment; provided, however, that the foregoing reduction shall be made only if and to the extent that such reduction would result in an increase in the aggregate payments and benefits to be provided to the Executive, determined on an after-tax basis (taking into account the excise tax imposed pursuant to Section 4999 of the Code, or any successor provision thereto, any tax imposed by any comparable provision of state law, and any applicable federal, state and local income taxes).  Any determinations required to be made under this Section 14 shall be made by the Employer’s independent accountants, which shall provide detailed supporting calculations both to the Employer and the Executive within 15 business days of the date of termination or such earlier time as is requested by the Employer, and shall be made at the expense of the Employer.  The fact that the Executive’s right to payments or benefits may be reduced by reason of the limitations contained in this Section 14 shall not of itself limit or otherwise affect any other rights of the Executive under this Agreement.  The reduction of the payments and benefits shall occur in the following order: (a) the payments that are payable in cash that are valued at full value under Treasury Regulation Section 1.280G-1, Q&A 24(a) shall be reduced (if necessary, to zero), with amounts that are payable last reduced first; (b) the payments that are payable in cash that are valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24, with amounts that are payable last reduced first, shall next be reduced; and (c) all non-cash benefits shall be next reduced pro-rata.

15.Section 409A.

(a)To the extent applicable, it is intended that this Agreement comply with the provisions of Section 409A of the Code, so that the income inclusion provisions of Section 409A(a)(1) of the Code do not apply to the Executive.  This Agreement shall be administered and interpreted in a manner consistent with this intent.  Consistent with that intent, and to the extent required under Section 409A of the Code, for benefits that are to be paid in connection with a termination of employment, “termination of employment” shall be limited to such a termination that constitutes a “separation from service” under Section 409A of the Code.

(b)Notwithstanding any provision of this Agreement to the contrary, if the Executive is a “specified employee” determined pursuant to procedures adopted by the Employer in compliance with Section  409A of the Code, on the date of his separation from service (within the meaning of Treasury Regulation section 1.409A-1(h)) and if any portion of the payments or benefits to be received by the Executive upon his termination of employment would constitute a “deferral of compensation” subject to Section 409A of the Code, then to the extent necessary to comply with Section 409A of the Code, amounts that would otherwise be payable pursuant to this Agreement during the six-month period immediately following the Executive’s termination of employment will instead be paid or made available on the earlier of (i) the first business day of the seventh month after the date of the Executive’s termination of employment, or (ii) the

11

Executive’s death.  For purposes of application of Section 409A of the Code, to the extent applicable, each payment made under this Agreement shall be treated as a separate payment.

(c)Notwithstanding any provision of this Agreement to the contrary, to the extent any reimbursement or in-kind benefit provided under this Agreement is nonqualified deferred compensation within the meaning of Section 409A of the Code: (i) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year; (ii) the reimbursement of an eligible expense must be made on or before the last day of the calendar year following the calendar year in which the expense was incurred; and (iii) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

16.Prevailing Party’s Litigation Expenses.  In the event of litigation between the Employer and the Executive related to this Agreement, the non-prevailing party shall reimburse the prevailing party for any costs and expenses (including, without limitation, attorneys’ fees) reasonably incurred by the prevailing party in connection therewith.

17.Entire Agreement; Amendments.  This Agreement constitutes the entire understanding between the Parties with respect to the subject matter and supersedes, terminates, and replaces any prior or contemporaneous understandings or agreements, including but not limited to, the Prior Agreement, which is superseded by this Agreement and is of no further force or effect.  This Agreement may be amended, supplemented, waived, or terminated only by a written instrument duly executed by the Parties.

18.Headings.  The headings in this Agreement are for convenience of reference only and shall not affect its interpretation.

19.Severability.  The covenants in this Agreement shall be construed as independent of one another, and as obligations distinct from one another and any other contract between the Executive and the Employer.  If any provision of this Agreement is held illegal, invalid, or unenforceable, such illegality, invalidity, or unenforceability shall not affect any other provisions hereof.  It is the intention of the Parties that in the event any provision is held illegal, invalid or unenforceable, that such provision be limited so as to effect the intent of the Parties to the fullest extent permitted by applicable law.  Any claim by the Executive against the Employer shall not constitute a defense to enforcement by the Employer of this Agreement.

20.Survival.  The provisions of Sections 6 and 7 are independent of, and survive after the termination of, the other portions of this Agreement.

21.Notices.  All notices, demands, waivers, consents, approvals, or other communications required hereunder shall be in writing and shall be deemed to have been given if delivered personally, if sent by telegram, telex or facsimile with confirmation of receipt, if sent by certified or registered mail, postage prepaid, return receipt requested, or if sent by same day or overnight courier service to the following addresses:

If to the Employer, to:

Molycorp, Inc.

12

5619 Denver Tech Center Parkway

Suite 1000

Greenwood Village, Colorado  80111

Tel:  303-843-8040

Fax:  303-843-8082

If to the Executive, to:

John K. Bassett

c/o Molycorp, Inc.

5619 Denver Tech Center Parkway

Suite 1000

Greenwood Village, Colorado  80111

Tel:  303-843-8040

Fax:  303-843-8082

With a copy to:

The home address of the Executive that is on record with the Employer.

Notice of any change in any such address shall also be given in the manner set forth above.  Whenever the giving of notice is required, the giving of such notice may be waived by the Party entitled to receive such notice.

22.Waiver.  The failure of any Party to insist upon strict performance of any of the terms or conditions of this Agreement shall not constitute a waiver of any of such Party’s rights hereunder.

23.Assignment.  Other than as provided below, neither Party may assign any rights or delegate any of obligations hereunder without the prior written consent of the other Party, and such purported assignment or delegation shall be void; provided that the Employer may assign the Agreement to any entity that purchases the stock or assets of the Employer or any affiliate.  This Agreement binds, inures to the benefit of, and is enforceable by the successors and permitted assigns of the Parties and does not confer any rights on any other persons or entities.

24.Governing Law.  This agreement shall be construed and enforced in accordance with Colorado law, except for any Colorado conflict-of-law principle that might require the application of the laws of another jurisdiction.

25.Choice of Forum.  Any dispute arising from or relating to this Agreement shall be resolved in the District Court for the City and County of Denver or in the United States District Court for the District of Colorado.

[Signature Page Follows]

13

IN WITNESS WHEREOF, the Parties have executed this Agreement on the dates below:

EMPLOYER:		EXECUTIVE:
MOLYCORP, INC.
By:	/s/ Mark A. Smith	/s/ John K. Bassett
Name:	Mark A. Smith	Name:  John K. Bassett
Title:	Chief Executive Officer	Date:    February 28, 2012
Date:	February 28, 2012

14

Exhibit A

For purposes of this Agreement:

1.“Change of Control” means the occurrence of any of the following events:

i)the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of voting securities of the Employer where such acquisition causes such Person to own more than 50% of the combined voting power of the then outstanding voting securities of the Employer entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (i), the following acquisitions shall not be deemed to result in a Change of Control:  (A) any acquisition directly from the Employer that is approved by the Incumbent Board (as defined in subsection (ii) below), (B) any acquisition by the Employer, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Employer or any corporation controlled by the Employer or (D) any acquisition by any corporation pursuant to a transaction that complies with clauses (A), (B) and (C) of subsection (iii) below; provided, further, that if any Person’s beneficial ownership of the Outstanding Company Voting Securities exceeds 50% as a result of a transaction described in clause (A) or (B) above, and such Person subsequently acquires beneficial ownership of additional voting securities of the Employer, such subsequent acquisition shall be treated as an acquisition that causes such Person to own more than 50% of the Outstanding Company Voting Securities; and provided, further, that if at least a majority of the members of the Incumbent Board determines in good faith that a Person has acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than 50% of the Outstanding Company Voting Securities inadvertently, and such Person divests as promptly as practicable a sufficient number of shares so that such Person beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act) less than or equal to 50% of the Outstanding Company Voting Securities, then no Change of Control shall have occurred as a result of such Person’s acquisition;

ii)individuals who, as of September 30, 2010, constituted the Board (the “Incumbent Board” as modified by this subsection (ii)) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to September 30, 2010 whose election, or nomination for election by the Employer’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (either by specific vote or by approval of the proxy statement of the Employer in which such person is named as a nominee for

director, without objection to such nomination) shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;

iii)the consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Employer or the acquisition of assets of another corporation or other transaction (“Business Combination”) excluding, however, such a Business Combination pursuant to which (A) the individuals and entities who were the beneficial owners of the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity that as a result of such transaction owns the Employer or all or substantially all of the Employer’s assets either directly or through one or more subsidiaries), (B) no Person (excluding any employee benefit plan (or related trust) of the Employer, the Employer or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, more than 50% of the combined voting power of the then outstanding securities entitled to vote generally in the election of directors of the entity resulting from such Business Combination and (C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

iv)approval by the stockholders of the Employer of a complete liquidation or dissolution of the Employer except pursuant to a Business Combination that complies with clauses (A), (B) and (C) of subsection (iii) above.

2.“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended and in effect from time to time, and any successor statute.

16

EX-23.1

Exhibit 23.1

SRK Consulting (U.S.), Inc. Suite 3000 7175 West Jefferson Avenue Lakewood, CO 80235 T: 303.985.1333 F: 303.985.9947 denver@srk.com www.srk.com

CONSENT OF SRK CONSULTING (US), INC.

We consent to the incorporation by reference in Registration Statement No. 333-169450 on Form S-8 and Registration Statement No. 333-176107 on Form S-3 of our report dated April 28, 2010 and our report dated April 2012 appearing in this Quarterly Report on Form 10-Q of Molycorp, Inc. for the quarter ended March 31, 2012.

Date: May 10, 2012	SRK CONSULTING (US), INC.
	Name:	Terry Braun, P.E.
	Title:	Vice President, Principal Environmental Engineer

U.S. Offices:		Mexico Office:	Canadian Offices:		Group Offices:
Anchorage	907.677.3520	Guadalupe,	Saskatoon	306.955.4778	Africa
Denver	303.985.1333	Zacatecas	Sudbury	705.682.3270	Asia
Elko	775.753.4151	52.492.927.8982	Toronto	416.601.1445	Australia
Fort Collins	970.407.8302		Vancouver	604.681.4196	Europe
Reno	775.828.6800		Yellowknife	867.873.8670	North America
Tucson	520.544.3688				South America

EX-31.1

QuickLinks -- Click here to rapidly navigate through this document

EXHIBIT 31.1

CERTIFICATION

I, Mark A. Smith, certify that:

1.

I have reviewed this quarterly report on Form 10-Q of Molycorp, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 10, 2012

/s/ MARK A. SMITH
Mark A. Smith
President and Chief Executive Officer

QuickLinks

EXHIBIT 31.1

CERTIFICATION

EX-31.2

QuickLinks -- Click here to rapidly navigate through this document

EXHIBIT 31.2

CERTIFICATION

I, James S. Allen, certify that:

1.

I have reviewed this quarterly report on Form 10-Q of Molycorp, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 10, 2012

/s/ JAMES S. ALLEN
James S. Allen
Chief Financial Officer and Treasurer

QuickLinks

EXHIBIT 31.2

CERTIFICATION

EX-32.1

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 32.1

CERTIFICATION
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

        In connection with the Quarterly Report on Form 10-Q of Molycorp, Inc. (the "Company") for the quarterly period ended March 31, 2012, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Mark A. Smith, as President and Chief Executive Officer of the Company, and James S. Allen, as Chief Financial Officer and Treasurer of the Company, each hereby certifies, pursuant to and solely for the purpose of 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, to the best of his knowledge and belief, that:

        (1)   The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

        (2)   The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.

/s/ MARK A. SMITH
Mark A. Smith
President and Chief Executive Officer

May 10, 2012

/s/ JAMES S. ALLEN
James S. Allen
Chief Financial Officer and Treasurer

May 10, 2012

QuickLinks

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

EX-95.1

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 95.1

Molycorp, Inc.

Mine Safety Disclosure Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and
Consumer Protection Act for the Quarter Ended March 31, 2012

        Molycorp, Inc. (the "Company") operates a single rare earth mine and processing facility at Mountain Pass, California (the "Molycorp Mountain Pass facility"). Operations at the Molycorp Mountain Pass facility are subject to regulation by, among other agencies, the federal Mine Safety and Health Administration ("MSHA") under the Federal Mine Safety and Health Act of 1977, as amended by the Mine Improvement and New Emergency Response Act of 2006 (the "Mine Act").

        Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Section 1503(a)") requires the Company to present certain information regarding mining safety in its periodic reports filed with the Securities and Exchange Commission.

        The following table reflects citations, orders and notices issued to the Company by MSHA during the three months ended March 31, 2012 (the "Reporting Period") and contains certain additional information as required by Section 1503(a) and Item 104 of Regulation S-K, including information regarding mining-related fatalities, proposed assessments from MSHA and legal actions ("Legal Actions") before the Federal Mine Safety and Health Review Commission ("FMSHRC"), an independent adjudicative agency that provides administrative trial and appellate review of legal disputes arising under the Mine Act. The proposed assessments for the Reporting Period were taken from the MSHA data retrieval system as of April 29, 2012.

        Included below is the information required by Section 1503(a) with respect to the Molycorp Mountain Pass facility (MSHA Identification Number 0402542) for the Reporting Period:

(A)	Total number of alleged violations of mandatory health or safety standards that could significantly and substantially contribute to the cause and effect of a mine safety or health hazard under Section 104 of the Mine Act for which the Company received a citation from MSHA		16
(B)	Total number of orders issued under Section 104(b) of the Mine Act		0
(C)	Total number of citations and orders for alleged unwarrantable failure by the Company to comply with mandatory health or safety standards under Section 104(d) of the Mine Act		3
(D)	Total number of alleged flagrant violations under Section 110(b)(2) of the Mine Act		0
(E)	Total number of imminent danger orders issued under Section 107(a) of the Mine Act		0
(F)	Total dollar value of proposed assessments from MSHA under the Mine Act	$	13,132
(G)	Total number of mining-related fatalities		0
(H)	Received notice from MSHA of a pattern of violations under Section 104(e) of the Mine Act		No
(I)	Received notice from MSHA of the potential to have a pattern of violations under Section 104(e) of the Mine Act		No
(J)	Total number of Legal Actions pending as of the last day of the Reporting Period		1	(1)
(K)	Total number of Legal Actions instituted during the Reporting Period		0
(L)	Total number of Legal Actions resolved during the Reporting Period		0

(1)

Relates to contest of proposed penalties referenced in Subpart C of FMSHRC's Procedural Rules.

QuickLinks

Exhibit 95.1

Molycorp, Inc.
Mine Safety Disclosure Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act for the Quarter Ended March 31, 2012

XML

Accrued Expenses (Tables)

3 Months Ended

Mar. 31, 2012

Accrued Expenses

Schedule of accrued expenses

	March 31, 2012		December 31, 2011
Defined contribution plan	$	782	$	1,088
Accrued payroll and related benefits		3,053		3,024
Sales and use tax		1,272		1,367
Bonus accrual		582		4,845
Interest payable		2,192		345
Unrealized loss on derivatives		6,641		265
Other accrued expenses		980		1,964
Total accrued expenses	$	15,502	$	12,898

XML

Investments (Details)	1 Months Ended	3 Months Ended	46 Months Ended	1 Months Ended		3 Months Ended
	Sep. 30, 2011 USD ($)	Mar. 31, 2012 USD ($)	Mar. 31, 2012 USD ($)	Jan. 31, 2012 Intermetallics Japan USD ($)	Jan. 31, 2012 Intermetallics Japan JPY (¥)	Mar. 31, 2012 Intermetallics Japan USD ($)	Nov. 28, 2011 Intermetallics Japan	Nov. 28, 2011 Intermetallics Japan Daido	Nov. 28, 2011 Intermetallics Japan Mitsubishi
Investments in non-marketable securities
Investment in Boulder Wind Power's Series B convertible preferred stock	$ 20,000,000		$ 20,000,000
Intermetallics Japan - IMJ
Capital contribution ratio (as a percent)							30.00%	35.50%	34.50%
Capital contribution		3,836,000	3,836,000	3,800,000
Capital contribution				30,400,000	2,500,000,000
Loss from the entity's proportional ownership in joint venture		$ (227,000)	$ (227,000)			$ 200,000

XML

Trade Accounts Receivable (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2012
Trade Accounts Receivable
Allowance for doubtful accounts	$ 2.5

XML

Research and Development (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		46 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Mar. 31, 2012
Research and Development
Research and development costs	$ 3.9	$ 1.5	$ 16.5

XML

Acquisitions (Details) (USD $)	3 Months Ended		7 Months Ended	12 Months Ended			46 Months Ended	1 Months Ended	3 Months Ended			1 Months Ended			3 Months Ended			1 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Dec. 31, 2008	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Mar. 31, 2012	Oct. 31, 2011 Molycorp Silmet	Mar. 31, 2012 Molycorp Silmet metrictonne	Oct. 24, 2011 Molycorp Silmet	Apr. 01, 2011 Molycorp Silmet	Apr. 30, 2011 Molycorp Silmet AS Silmet Grupp D	Apr. 01, 2011 Molycorp Silmet AS Silmet Grupp	Apr. 01, 2011 Molycorp Silmet Treibacher Industrie AG	Mar. 31, 2012 Molycorp Silmet Customer relationships Y	Mar. 31, 2011 MMA	Apr. 15, 2011 MMA	Apr. 30, 2011 MMA Santoku Y
Acquisitions
Interest acquired (as a percent)										9.977%	90.023%		80.00%	10.023%
Purchase consideration:
Cash consideration										$ 10,000,000	$ 9,021,000			$ 9,000,000			$ 17,500,000
Fair value of common stock											72,653,000
Total purchase consideration											81,674,000						17,500,000
The fair values of the assets and liabilities acquired:
Cash											105,000						6,395,000
Accounts receivable and other current assets											8,626,000						5,474,000
Inventory											37,404,000						11,327,000
Property and equipment, net											63,393,000						4,512,000
Intangible assets subject to amortization											2,669,000
Goodwill											1,455,000						1,977,000
Liabilities											(19,974,000)						(8,989,000)
Deferred tax liabilities																	(3,196,000)
Long-term debt											(3,184,000)
Noncontrolling interest											(8,820,000)
Total purchase consideration											81,674,000						17,500,000
Fair value of trade receivable acquired											5,000,000						4,900,000
Weighted average useful life (in years)															15
Actuals
Revenue	84,470,000
Net (loss) income	(3,478,000)	(2,198,000)	(14,074,000)	118,334,000	(50,774,000)	(28,587,000)	21,421,000
Basic earnings (loss) per share (in dollars per share)	$ (0.07)	$ (0.04)					$ 0.14
Unaudited proforma
Revenue		59,734,000
Net Income (loss)		4,916,000
Net Income (loss) Attributable To Molycorp		4,623,000
EPS Basic (in dollars per share)		$ 0.04
Other actual and pro forma information
Purchase price variance capitalized																1,100,000
Other disclosures
Common stock issued to acquire the entity (in shares)												1,593,419
Contractual value of shares issued to acquire the entity												80,000,000
Number of consecutive trading days considered for calculation of closing price												20
Discount percentage deducted from common stock price												23.00%
Increase in rare earth production capacity (in mt)									3,000
Adjustment to Additional Paid-In Capital								$ 400,000
Period of marketing and distribution agreement (in years)																		5
Period of rare earth products purchase and supply agreement (in years)																		2

XML

Supplemental Cash Flow Information (Tables)

3 Months Ended

Mar. 31, 2012

Supplemental Cash Flow Information

Summary of supplemental cash flow information

(In thousands)	Three Months Ended March 31, 2012		Three Months Ended March 31, 2011		Total from June 12, 2008 (Inception) through March 31, 2012
Non-cash financing activities and investing activities:
Conversion of short-term borrowings from member plus accrued interest, into common shares	$	—	$	—	$	6,831
Change in accrued capital expenditures	$	55,226	$	14,896	$	172,858

XML

Subsequent Events

3 Months Ended

Mar. 31, 2012

Subsequent Events

Subsequent Events

(26) Subsequent Events

Preferred stock dividend

        In May 2012, the Company declared a cash dividend of $1.375 per share on the Convertible Preferred Stock. The aggregate dividend of $2.8 million will be paid on June 1, 2012 to holders of record at the close of business on May 15, 2012.

XML

Asset Retirement Obligation (Details) (USD $)	3 Months Ended		12 Months Ended	46 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Dec. 31, 2011	Mar. 31, 2012
Asset retirement obligation activity
Balance at beginning of period	$ 15,541,000	$ 12,471,000	$ 12,471,000
Obligations settled	(124,000)		(1,030,000)
Accretion expense	251,000	234,000	955,000	3,374,000
Revisions in estimated cash flows	1,919,000		2,508,000
Gain on settlement			637,000
Balance at end of period	17,587,000		15,541,000	17,587,000
Financial assurance requirement satisfied with surety bonds	$ 28,800,000			$ 28,800,000

XML

Derivative Instruments (Details)	3 Months Ended	46 Months Ended
	Mar. 31, 2012 USD ($) contract	Mar. 31, 2012 USD ($) contract	Mar. 28, 2012 CAD	Dec. 31, 2011 USD ($)	Sep. 30, 2011 contract
Derivative Instruments
Notional amount of derivatives			870,000,000
Unrealized loss on derivatives resulting from changes in fair value	6,641,000	6,643,000
Fair value of derivatives	6,641,000	6,641,000		265,000
Number of derivative forward contracts entered					3
Number of derivative forward contracts settled	2	2
Realized loss on settlement of derivative forward contracts	200,000
Unrealized loss on derivative forward contracts	$ 40,000

XML

Commitments and Contingencies

3 Months Ended

Mar. 31, 2012

Commitments and Contingencies

Commitments and Contingencies

(18) Commitments and Contingencies

(a)    Future Operating Lease Commitments

        The Company has certain operating leases for office space, trailers and certain equipment. Remaining annual minimum payments under these leases at March 31, 2012 were $1.5 million for the remainder of 2012, $0.6 million in 2013, $0.5 million in 2014, $0.5 million in 2015, $0.5 million in 2016 and zero thereafter, totaling $3.6 million.

(b)    Capital Commitments

        In connection with the Molycorp Mountain Pass facility modernization and expansion and future operations, the Company entered into contractual commitments for the purchase of materials and services from various vendors. Future payments for these commitments are estimated at $384.7 million due over one and two years.

        Total capital spending for Project Phoenix Phase 1, Project Phoenix Phase 2 and other capital projects related to operations at Molycorp Mountain Pass for the remainder of 2012 is expected to be approximately $336.0 million. The Company is encountering cost pressures on its projects and management has initiated measures to mitigate certain adverse cost trends. While management is continuing to re-evaluate the impact on the Company's budgets, the Company will incur additional costs, which may be significant, if our mitigation measures are not successful.

(c)    Potential Environmental Obligations

        As part of its ongoing remediation efforts at the Molycorp Mountain Pass facility, the Company identified liner defects in three of the onsite evaporation ponds in 2011. This led to minor groundwater contamination issues that are limited to a small area directly underneath the evaporation ponds. In order to remediate this issue, the Company will replace the primary lining system and might have to install a groundwater recovery system. The Company estimated the cost of these items at between $2.4 million and $4.6 million, which will be treated as capital expenditures. The Company is in the process of finalizing the remediation plans with the Regional Water Quality board.

(d)    Labor Contract

        Certain Molycorp Mountain Pass facility employees are covered by a collective bargaining agreement with the United Steelworkers of America that expires on March 15, 2015. At March 31, 2012, 168 employees, or approximately 57% of the Company's workforce at the Molycorp Mountain Pass facility, were covered by this collective bargaining agreement.

        At March 31, 2012, 174 employees, or approximately 30% of the workforce at the Company's Molycorp Silmet facility, were unionized employees. The contract with the labor union in Estonia was renewed by the end of February 2012.

(d)    Reclamation Surety Bonds

        At March 31, 2012, Molycorp had placed $28.8 million of surety bonds with California state and regional agencies to secure its Mountain Pass facility closure and reclamation obligations.

(e)    Purported class action and derivative lawsuits

        In February 2012, a purported class action lawsuit captioned, Angelo Albano, Individually and on Behalf of All Others Similarly Situated v. Molycorp, Inc., et al., was filed against the Company and certain of its executive officers in the U.S. District Court for the District of Colorado. This federal court action alleges, among other things, that the Company and those officers violated Section 10(b) of the Exchange Act in connection with statements relating to its third quarter fiscal 2011 financial results and fourth quarter 2011 production guidance that the Company had filed with or furnished to the SEC, or otherwise made available to the public. The plaintiffs are seeking unspecified damages and other relief. The Company believes the allegations are without merit and that it has valid defenses to such allegations. The Company intends to defend this action vigorously. The Company is unable to provide meaningful quantification of how the final resolution of these claims may impact its future consolidated financial position or results of operations.

        Seven stockholder derivative lawsuits have been filed in three different jurisdictions purportedly on behalf of Molycorp, Inc., against certain of its directors, certain of its officers, and certain of its private equity investors. These cases have been filed in the Delaware Chancery Court, the U.S. District Court in Colorado, and the District Court in Arapahoe County, Colorado. They are captioned: Gaines v. Smith et al., Case No. 7282 (Del. Ch. Feb. 12, 2012); Paskowitz v. Smith et al., Case No. 7319 (Del. Ch. Mar. 9, 2012); Wilson v. Smith et al., No. 7395-VCN (Del. Ch. April 4, 2012); Wells v. Smith et al., No. 1:12-cv-00447-WJM (D. Colo. Feb. 21, 2012); Swaggerty v. Smith et al., No. 12-cv-00589-CMA-KLM (D. Colo. Mar. 7, 2012); Clem v. Smith et al., No. 12 CV 392 (Arapahoe Cnty., Colo. Feb. 24, 2012); and Nationwide Consulting, Inc. v. Smith et al., No. 12 CV 448 (Arapahoe Cnty., Colo. Mar. 5, 2012). The Clem and Nationwide cases have since been consolidated under the caption Clem v. Smith et al., No. 12 CV 392 (Arapahoe Cnty., Colo.).

        The derivative complaints challenge among other things certain sales of stock by officers, directors and private equity firms, and certain Molycorp corporate acquisitions during 2011. The complaints assert causes of action for: (1) alleged breaches of fiduciary duty, including the duties of loyalty and due care; (2) alleged unjust enrichment; (3) alleged waste of corporate assets; and (4) alleged "abuse of control." On behalf of Molycorp, the plaintiffs in the derivative actions seek, among other things, monetary damages, restitution, an accounting, and certain changes to corporate governance procedures.

        The Defendants have filed a motion in each case seeking to consolidate the derivative actions in one jurisdiction, and have expressed a preference for the Delaware Court of Chancery.

        The Defendants deny allegations in the derivative complaints and will vigorously contest the claims in each lawsuit.

XML

Deposits (Details) (USD $)	Mar. 31, 2012	Dec. 31, 2011
Deposits
Deposits	$ 23,277,000	$ 23,286,000
Escrow deposit for facilities agreement with Kern River Gas Transmission Company	20,600,000
Deposits related to construction insurance program	1,500,000
Other restricted cash requirements related to deposits	$ 1,200,000

XML

Earnings (Loss) per Share (Tables)

3 Months Ended

Mar. 31, 2012

Earnings (Loss) per Share

Schedule of earnings per share, basic and diluted

(In thousands, except share and per share amounts)	Three Months Ended March 31, 2012			Three Months Ended March 31, 2011			Total from June 12, 2008 (Inception) Through March 31, 2012
Net (loss) income attributable to Molycorp stockholders	$	(3,478	)	$	(2,198	)	$	21,421
Cumulative undeclared and paid dividends on Convertible Preferred Stock		(2,846	)		(1,423	)		(12,808	)
(Loss) income attributable to common stockholders		(6,324	)		(3,621	)		8,613
Weighted average common shares outstanding—basic		87,006,460			82,253,700			60,086,657
Basic (loss) income per share	$	(0.07	)	$	(0.04	)	$	0.14
Weighted average common shares outstanding—diluted		87,006,460			82,253,700			60,087,803
Diluted (loss) income per share	$	(0.07	)	$	(0.04	)	$	0.14

XML

Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2012

Intangible Assets

Schedule of amortizable intangible assets

	March 31, 2012			December 31, 2011
Trade name	$	786		$	786
Customer relationships		2,221			2,153
Other		533			516
Gross carrying amount		3,540			3,455
Less accumulated amortization		(456	)		(383	)
Net carrying amount	$	3,084		$	3,072

XML

Mineral Properties and Development Costs (Details) (USD $)	3 Months Ended
	Mar. 31, 2012
Mineral Properties and Development Costs
Capitalized depletion costs in in work-in-process inventory	$ 21,000

XML

Related-Party Transactions (Details) (USD $)	3 Months Ended		46 Months Ended		3 Months Ended	12 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Mar. 31, 2012	Dec. 31, 2011	Mar. 31, 2012 Traxys North America LLC and affiliates	Dec. 31, 2011 Traxys North America LLC and affiliates	Dec. 31, 2011 Traxys North America LLC and affiliates Lanthanum oxide	Dec. 31, 2011 Traxys North America LLC and affiliates Yttrium and bastnasite material	Dec. 31, 2011 Traxys North America LLC and affiliates Tantalum Metal	Mar. 31, 2012 Traxys North America LLC and affiliates Tantalum Metal
Related Party Transactions
Principal payments made	$ 870,000	$ 935,000	$ 5,127,000		$ 900,000	$ 3,100,000
Outstanding amount of short-term borrowing payable to related party				870,000		900,000
Outstanding amount of trade accounts payable related to sales made to related party but not remitted						2,800,000
Purchases made from related party							6,200,000	700,000
Related party receivables									2,100,000	400,000
Sales to related party									3,200,000
Payable to related party					$ 65,000	$ 169,000

XML

Earnings (Loss) per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended				7 Months Ended	12 Months Ended			46 Months Ended
	Mar. 31, 2012		Mar. 31, 2011		Dec. 31, 2008	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Mar. 31, 2012
Earnings (Loss) per Share
Net (loss) income attributable to Molycorp stockholders	$ (3,478)		$ (2,198)		$ (14,074)	$ 118,334	$ (50,774)	$ (28,587)	$ 21,421
Cumulative undeclared and paid dividends on Convertible Preferred Stock	(2,846)		(1,423)						(12,808)
(Loss) income attributable to common stockholders	$ (6,324)		$ (3,621)						$ 8,613
Weighted average common shares outstanding - basic	87,006,460	[1]	82,253,700	[1]					60,086,657	[1]
Basic earnings (loss) income per share	$ (0.07)		$ (0.04)						$ 0.14
Weighted average common shares outstanding - diluted	87,006,460	[1]	82,253,700	[1]					60,087,803	[1]
Diluted (loss) income per share	$ (0.07)		$ (0.04)						$ 0.14

[1] Weighted average shares outstanding include the retroactive treatment of exchange ratios for conversion of Class A common stock and Class B common stock to common stock in conjunction with the initial public offering.

XML

Segment Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		46 Months Ended
	Mar. 31, 2012 location segment	Mar. 31, 2011	Mar. 31, 2012	Dec. 31, 2011
Segment Information
Number of primary divisions or operating segments	3
Number of production and shipping locations	1
Sales:
External	$ 84,470
Total sales	84,470	26,261	525,688
Cost of goods sold	(53,443)	(16,677)	(303,736)
Selling, general and administrative expenses	(31,214)	(11,238)	(158,778)
Depreciation, amortization and accretion expense	(358)
Operating (loss) income	(545)	(1,971)	58,431
Other (expense) income	(4,889)	(28)	(10,390)
(Loss) income before income taxes and equity earnings	(5,434)	(1,999)	48,041
Total assets	1,688,753		1,688,753	1,255,125
Capital expenditures (accrual basis excluding capitalized interest)	262,039
Intercompany accounts receivable	13,459		13,459
Intercompany investments	98,883		98,883
Molycorp Mountain Pass facility
Sales:
External	44,478
Intersegment	1,832
Total sales	46,310
Cost of goods sold	(18,846)
Selling, general and administrative expenses	(29,079)
Depreciation, amortization and accretion expense	(334)
Operating (loss) income	(1,949)
Other (expense) income	(6,444)
(Loss) income before income taxes and equity earnings	(8,393)
Total assets	1,675,653		1,675,653
Capital expenditures (accrual basis excluding capitalized interest)	259,438
Molycorp Silmet
Sales:
External	21,036
Intersegment	3,210
Total sales	24,246
Cost of goods sold	(34,774)
Selling, general and administrative expenses	(1,714)
Operating (loss) income	(12,242)
Other (expense) income	1,579
(Loss) income before income taxes and equity earnings	(10,663)
Total assets	100,499		100,499
Capital expenditures (accrual basis excluding capitalized interest)	2,501
MMA
Sales:
External	18,956
Total sales	18,956
Cost of goods sold	(18,632)
Selling, general and administrative expenses	(457)
Operating (loss) income	(133)
Other (expense) income	(4)
(Loss) income before income taxes and equity earnings	(137)
Total assets	24,313		24,313
Capital expenditures (accrual basis excluding capitalized interest)	100
Other
Sales:
Selling, general and administrative expenses	(273)
Depreciation, amortization and accretion expense	(24)
Operating (loss) income	(297)
Other (expense) income	(20)
(Loss) income before income taxes and equity earnings	(317)
Total assets	630		630
Eliminations
Sales:
Intersegment	(5,042)
Cost of goods sold	18,809
Selling, general and administrative expenses	309
Operating (loss) income	14,076
(Loss) income before income taxes and equity earnings	14,076
Total assets	$ (112,342)		$ (112,342)

XML

Segment Information

3 Months Ended

Mar. 31, 2012

Segment Information

Segment Information

(2) Segment Information

        The Company is currently organized into three primary divisions or operating segments: Molycorp Mountain Pass, Molycorp Silmet and Molycorp Metals and Alloys ("MMA"). Molycorp Mountain Pass owns and operates the Company's rare earth mine and processing facilities in Mountain Pass, California (the "Molycorp Mountain Pass facility"). Molycorp Silmet, which was acquired on April 1, 2011, produces REOs and rare metals at the Company's manufacturing facility located in Sillamäe, Estonia. MMA, which was acquired on April 15, 2011, manufactures neodymium and samarium magnet alloy and other specialty alloy products at the Company's facility in Tolleson, Arizona. Each of the segments has only one production and shipping location. Sales to external customers by geographic area are based on the location in which the sale originated.

        The following table provides operating and financial information of the three segments as of and for the three months ended March 31, 2012:

Three Months Ended March 31, 2012 (In thousands)	Molycorp Mountain Pass			Molycorp Silmet			MMA			Other(a)			Eliminations(b)			Total Molycorp, Inc.
Sales:
External	$	44,478		$	21,036		$	18,956		$	—		$	—		$	84,470
Intersegment		1,832			3,210			—						(5,042	)		—
Total sales		46,310			24,246			18,956
Cost of goods sold		(18,846	)		(34,774	)		(18,632	)		—			18,809			(53,443	)
Selling, general and administrative expenses		(29,079	)		(1,714	)		(457	)		(273	)		309			(31,214	)
Depreciation, amortization and accretion expense		(334	)		—			—			(24	)		—			(358	)
Operating (loss) income		(1,949	)		(12,242	)		(133	)		(297	)		14,076			(545	)
Other (expense) income		(6,444	)		1,579			(4	)		(20	)		—			(4,889	)
Loss before income taxes and equity earnings	$	(8,393	)	$	(10,663	)	$	(137	)	$	(317	)	$	14,076		$	(5,434	)
Total assets at March 31, 2012	$	1,675,653		$	100,499		$	24,313		$	630		$	(112,342	)	$	1,688,753
Capital expenditures (accrual basis excluding capitalized interest)	$	259,438		$	2,501		$	100		$	—		$	—		$	262,039

(a)

Includes expenses incurred by and capital invested in the sales office in Tokyo, Japan.

(b)

The $112,342 of total assets eliminations is comprised of $98,883 of intercompany investments and $13,459 of intercompany accounts receivable and profits in inventory. The $18,809 cost of goods sold elimination amount includes elimination of the intercompany gross profits as well as elimination of lower of cost or market adjustments related to the intercompany inventory.

XML

Stock-Based Compensation (Details) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended		46 Months Ended	3 Months Ended								3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Mar. 31, 2012	Mar. 31, 2012 PBRSUs	Mar. 31, 2012 PBRSUs Minimum	Mar. 31, 2012 PBRSUs Maximum	Mar. 31, 2012 RSUs	Mar. 02, 2012 RSUs	Feb. 02, 2012 RSUs	Mar. 31, 2012 Stock options	Dec. 31, 2011 Stock options	Mar. 31, 2012 RSAs
Stock-Based Compensation
Matching contribution by entity (as a percent)								25.00%	25.00%
Percentage of units vesting					0.00%	150.00%
Increase in Additional Paid-In Capital due to conversion of the 2011 annual bonuses into RSUs							$ 0.6
Vesting period (in years)							3 years
Number of Shares
Unvested at the beginning of the period (in shares)							78,544					48,924
Granted (in shares)				45,553			188,844
Forfeited (in shares)												(221)
Vested (in shares)							(20,683)
Unvested at the end of the period (in shares)				45,553			246,705					48,703
Weighted Average Grant-Date Fair Value
Unvested shares at the beginning of the period (in dollars per share)							$ 56.55					$ 40.20
Granted (in dollars per share)				$ 30.33			$ 26.43
Forfeited (in dollars per share)												$ 48.87
Vested (in dollars per share)							$ 29.06
Unvested shares at the end of the period (in dollars per share)				$ 30.33			$ 35.80					$ 40.16
Number of Shares
Outstanding at beginning of year (in shares)										52,819	52,819
Outstanding at end of year (in shares)										52,819	52,819
Options exercisable at year-end (in shares)										17,606
Weighted Average Exercise Price
Outstanding at beginning of year (in dollars per share)										$ 48.87	$ 48.87
Outstanding at end of year (in dollars per share)										$ 48.87	$ 48.87
Options exercisable at year-end (in dollars per share)										$ 48.87
Total annual compensation cost recognized	$ 0.8	$ 2.9	$ 34.4

XML

Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2012

Stock-Based Compensation

Summary of activity related to stock-based awards

PBRSUs	Number of Shares		Weighted Average Grant-Date Fair Value
Unvested at January 1, 2012		—		—
Granted		45,553	$	30.33
Forfeited		—		—
Vested		—		—
Unvested at March 31, 2012		45,553	$	30.33

RSUs	Number of Shares			Weighted Average Grant-Date Fair Value
Unvested at January 1, 2012		78,544		$	56.55
Granted		188,844		$	26.43
Forfeited		—			—
Vested*		(20,683	)	$	29.06
Unvested at March 31, 2012		246,705		$	35.80

*

Represents deferral and conversion of a portion of fees payable to certain non-employee directors of the Company, and deferral and conversion of a portion of the 2011 annual cash bonuses paid to certain executive officers and other employees of the Company.

RSAs	Number of Shares			Weighted Average Grant-Date Fair Value
Unvested at January 1, 2012		48,924		$	40.20
Granted		—			—
Forfeited		(221	)	$	48.87
Vested		—			—
Unvested at March 31, 2012		48,703		$	40.16

Summary of the activity and other information related to stock option awards

	March 31, 2012
Stock Options	Number of Shares		Weighted Average Exercise Price
Outstanding at January 1, 2012		52,819	$	48.87
Granted		—		—
Exercised		—		—
Forfeited and expired		—		—
Outstanding at March 31, 2012		52,819	$	48.87
Options exercisable at March 31, 2012		17,606	$	48.87

XML

Supplemental Cash Flow Information

3 Months Ended

Mar. 31, 2012

Supplemental Cash Flow Information

Supplemental Cash Flow Information

(22) Supplemental Cash Flow Information

(In thousands)	Three Months Ended March 31, 2012		Three Months Ended March 31, 2011		Total from June 12, 2008 (Inception) through March 31, 2012
Non-cash financing activities and investing activities:
Conversion of short-term borrowings from member plus accrued interest, into common shares	$	—	$	—	$	6,831
Change in accrued capital expenditures	$	55,226	$	14,896	$	172,858

XML

Net Change in Operating Assets and Liabilities

3 Months Ended

Mar. 31, 2012

Net Change in Operating Assets and Liabilities

Net Change in Operating Assets and Liabilities

(21) Net Change in Operating Assets and Liabilities

        Net cash used in (provided by) operating activities related to changes in operating assets and liabilities, net of the effects of acquisitions and dispositions, consist of the following:

(In thousands)	Three Months Ended March 31, 2012			Three Months Ended March 31, 2011			Total from June 12, 2008 (Inception) through March 31, 2012
Decrease (increase) in operating assets:
Accounts receivable	$	25,408		$	(1,160	)	$	(44,368	)
Inventory		(4,442	)		(1,175	)		(82,654	)
Prepaid expenses and other assets		382			(874	)		(7,004	)
Increase (decrease) in operating liabilities:
Accounts payable		(13,924	)		2,803			6,494
Prepaid income taxes		1,560			—			(16,272	)
Asset retirement obligation		—			(165	)		(2,049	)
Accrued expenses		(4,605	)		2,074			8,032
	$	4,379		$	1,503		$	(137,821	)

XML

Accrued Expenses (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Accrued Expenses
Defined contribution plan	$ 782	$ 1,088
Accrued payroll and related benefits	3,053	3,024
Sales and use tax	1,272	1,367
Bonus accrual	582	4,845
Interest payable	2,192	345
Unrealized loss on derivatives	6,641	265
Other accrued expenses	980	1,964
Total accrued expenses	$ 15,502	$ 12,898

XML

Concentrations (Tables)

3 Months Ended

Mar. 31, 2012

Concentrations

Summary of percent of revenue, by product, accounting for more than 10% of sales

	March 31, 2012			March 31, 2011
Lanthanum products		46	%		44	%
Cerium products		1	%		34	%
Didymium, Neodymium and Praseodymium products		53	%		18	%

XML

Research and Development

3 Months Ended

Mar. 31, 2012

Research and Development

Research and Development

(23) Research and Development

        The Company has invested significant resources to improve the efficiency of its REOs processing operations, the development of new applications for individual rare earth elements and exploratory drilling. For the three months ended March 31, 2012 and 2011, and cumulatively for the period from June 12, 2008 (Inception) through March 31, 2012, the Company spent $3.9 million, $1.5 million and $16.5 million, respectively, on research and development. These costs are included in selling, general and administrative expenses on the condensed consolidated statements of operations and comprehensive income, and consist primarily of salaries, outside labor, material and equipment.

XML

Derivative Instruments

3 Months Ended

Mar. 31, 2012

Derivative Instruments

Derivative Instruments

(24) Derivative Instruments

        On March 28, 2012, the Company entered into a contingent forward contract to purchase Canadian dollars ("Cdn") with a notional amount of Cdn$870.0 million to manage the foreign currency exposure with respect to its planned acquisition of Neo Material Technologies Inc. ("Neo"). The Company did not apply hedge accounting to this contingent foreign currency forward contract. As a result, the change in the fair value of this derivative instrument resulted in an unrealized loss of $6.7 million for the quarter ended March 31, 2012, recorded as part of Other expense. This derivative has a maturity of September 4, 2012. The derivative fair value of $6.7 million at March 31, 2012 was recorded in Accrued expenses.

        During the third quarter of 2011, the Company, through its subsidiary, Molycorp Minerals, entered into three derivative forward contracts to manage its foreign currency exposure with respect to Euro denominated purchases of certain equipment. The Company did not apply hedge accounting to these foreign currency forward contracts. Two of these derivatives were settled during the first quarter of 2012 resulting in a realized loss of $0.2 million, the majority of which was previously recorded in the last two quarters of 2011 as unrealized expense under Other expense. The change in the fair value of the third derivative contract not yet settled at March 31, 2012, resulted in an unrealized loss of approximately $40,000, the majority of which was already recorded in the last two quarters of 2011 under Other expense.

        The Company accounts for derivative instruments using the fair value method. GAAP provides for a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Level 1 inputs are quoted market prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted market prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability.

        The fair value measurement of the derivative forward contracts outstanding at March 31, 2012, was determined using internally developed discounted cash flow models. The inputs to these models consisted of, or were derived from, observable Level 2 data for substantially the full term of each derivative instrument. The internally determined fair value was then compared to the fair value assessment from the counterparties to these derivative contracts; large or unexpected differences between the Company's internal valuation and the fair value assessment from the counterparties were investigated and reconciled.

        The Company expects that the values to be realized on these derivatives will be based on market conditions at the time of settlement, which will occur at the maturity of each derivative instrument.

XML

Basis of Presentation

3 Months Ended

Mar. 31, 2012

Basis of Presentation

Basis of Presentation

(1) Basis of Presentation

        Molycorp, Inc. ("Molycorp" or the "Company") is the largest rare earth oxides ("REOs") producer in the Western hemisphere and owns one of the world's largest rare earth projects outside of China. Molycorp also owns one of the largest REOs and rare metal producers in Europe, and the only producer of rare earth alloys in the United States. Molycorp, Inc. was formed on March 4, 2010 for the purpose of continuing the business of Molycorp, LLC in corporate form. On April 15, 2010, the members of Molycorp, LLC contributed either (a) all of their member interests in Molycorp, LLC or (b) all of their equity interest in entities that held member interests in Molycorp, LLC (and no other assets or liabilities) to Molycorp, Inc. in exchange for Molycorp, Inc. Class A common stock. Accordingly, Molycorp, LLC and its wholly owned subsidiary, Molycorp Minerals, LLC ("Molycorp Minerals"), became subsidiaries of Molycorp, Inc., which we refer to as the Corporate Reorganization. On June 15, 2010, Molycorp LLC was merged with and into Molycorp Minerals.

        The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and Regulation S-X promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"). While the December 31, 2011 balance sheet information was derived from the Company's audited financial statements, for interim periods, GAAP and Regulation S-X do not require all information and related disclosures that are required in the annual financial statements, and all disclosures required by GAAP for annual financial statements have not been included. Therefore, the accompanying unaudited condensed consolidated financial statements should be read in conjunction with Molycorp's consolidated financial statements and related notes for the year ended December 31, 2011, and the period from June 12, 2008 (Inception) through December 31, 2011, included in Molycorp's Form 10-K for the fiscal year ended December 31, 2011.

        The accompanying unaudited condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, and which, in the opinion of management, are necessary for the fair presentation of Molycorp's financial position, results of operations and cash flows at March 31, 2012, and for all periods presented. The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its consolidated subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

        The preparation of the financial statements, in accordance with GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates on the Company's historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ significantly from these estimates under different assumptions and conditions. Significant estimates made by management in the accompanying financial statements include the collectability of accounts receivable, the recoverability of inventory, the useful lives and recoverability of long-lived assets such as property, plant and equipment, intangible assets and investments, the fair values of assets acquired and liabilities assumed, including business combinations, and the adequacy of the Company's asset retirement obligations.

XML

Recent Accounting Pronouncements

3 Months Ended

Mar. 31, 2012

Recent Accounting Pronouncements

Recent Accounting Pronouncements

(25) Recent Accounting Pronouncements

        In September 2011, the FASB issued ASU 2011-08, Testing Goodwill for Impairment. Under this updated guidance, an entity will have the option to first assess qualitatively whether it is necessary to perform the current two-step goodwill impairment test. If an entity believes, as a result of its qualitative assessment, that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is required. Otherwise, no further testing is necessary. The update does not change how an entity performs the two-step impairment test under the current guidance. This ASU is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted. The Company does not expect the adoption of this updated guidance to have a significant impact on its financial statements.

        In December 2011, the FASB issued ASU 2011-12, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in ASU 2011-05. ASU 2011-12 defers the requirement that companies present reclassification adjustments for each component of Accumulated Other Comprehensive Income ("AOCI") in both net income and other comprehensive income on the face of the financial statements.

        Companies will continue to be required to present amounts reclassified out of AOCI on the face of the financial statements or disclose those amounts in the notes to the financial statements. During the deferral period, there is no requirement to separately present or disclose the reclassification adjustments into net income. For the period ended March 31, 2012, the Company did not have any reclassification adjustments for components of AOCI.

XML

Asset Retirement Obligation (Tables)

3 Months Ended

Mar. 31, 2012

Asset Retirement Obligation

Schedule of activity in asset retirement obligation

	Three Months Ended March 31, 2012			Year Ended December 31, 2011
Balance at beginning of period	$	15,541		$	12,471
Obligations settled		(124	)		(1,030	)
Accretion expense		251			955
Revisions in estimated cash flows		1,919			2,508
Gain on settlement		—			637
Balance at end of period	$	17,587		$	15,541

XML

Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Intangible Assets
Gross carrying amount	$ 3,540	$ 3,455
Less accumulated amortization	(456)	(383)
Net carrying amount	3,084	3,072
Trade name
Intangible Assets
Gross carrying amount	786	786
Customer relationships
Intangible Assets
Gross carrying amount	2,221	2,153
Other
Intangible Assets
Gross carrying amount	$ 533	$ 516

XML

Subsequent Events (Details) (Preferred stock, USD $) In Millions, except Per Share data, unless otherwise specified	1 Months Ended
	Feb. 29, 2012	May 31, 2012 Preferred dividend	May 02, 2012 Preferred dividend
Subsequent Events
Cash dividend declared (in dollars per share)	$ 1.375	$ 1.375
Aggregate dividend payable			$ 2.8

XML

Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 609,794	$ 418,855
Trade accounts receivable, net (Note 3)	50,715	70,679
Inventory (Note 4)	110,487	111,943
Deferred charges (Note 14)	6,862	7,318
Deferred tax assets (Note 14)	2,049
Prepaid income taxes	9,467	10,514
Prepaid expenses and other assets	7,302	19,735
Total current assets	796,676	639,044
Non-current assets:
Deposits (Note 5)	23,277	23,286
Property, plant and equipment, net (Note 6)	827,716	561,628
Inventory (Note 4)	10,200	4,362
Intangible assets, net (Note 8)	3,084	3,072
Investments (Note 9)	23,608	20,000
Goodwill (Note 10)	3,432	3,432
Other assets	760	301
Total non-current assets	892,077	616,081
Total assets	1,688,753	1,255,125
Current liabilities:
Trade accounts payable	203,986	161,587
Accrued expenses (Note 11)	15,502	12,898
Deferred tax liabilities (Note 14)		1,356
Debt (Note 13)	1,383	1,516
Short-term borrowing-related party (Note 20)		870
Current portion of asset retirement obligation (Note 12)	1,552	396
Total current liabilities	222,423	178,623
Non-current liabilities:
Asset retirement obligation (Note 12)	16,035	15,145
Deferred tax liabilities (Note 14)	18,580	18,899
Debt (Note 13)	197,917	196,545
Other non-current liabilities	861	683
Total non-current liabilities	233,393	231,272
Total liabilities	455,816	409,895
Commitments and contingencies (Note 18)
Stockholders' equity:
Common stock, $0.001 par value; 350,000,000 shares authorized at March 31, 2012 (Note 15)	96	84
Preferred stock, $0.001 par value; 5,000,000 shares authorized at March 31, 2012 (Note 15)	2	2
Additional paid-in capital	1,230,036	838,547
Accumulated other comprehensive loss	(5,951)	(8,481)
Surplus accumulated during the development stage	8,754	15,078
Total stockholders' equity	1,232,937	845,230
Total liabilities and stockholders' equity	$ 1,688,753	$ 1,255,125

XML

Net Change in Operating Assets and Liabilities (Tables)

3 Months Ended

Mar. 31, 2012

Net Change in Operating Assets and Liabilities

Schedule of changes in operating assets and liabilities, net of the effects of acquisitions and dispositions

(In thousands)	Three Months Ended March 31, 2012			Three Months Ended March 31, 2011			Total from June 12, 2008 (Inception) through March 31, 2012
Decrease (increase) in operating assets:
Accounts receivable	$	25,408		$	(1,160	)	$	(44,368	)
Inventory		(4,442	)		(1,175	)		(82,654	)
Prepaid expenses and other assets		382			(874	)		(7,004	)
Increase (decrease) in operating liabilities:
Accounts payable		(13,924	)		2,803			6,494
Prepaid income taxes		1,560			—			(16,272	)
Asset retirement obligation		—			(165	)		(2,049	)
Accrued expenses		(4,605	)		2,074			8,032
	$	4,379		$	1,503		$	(137,821	)

XML

Condensed Consolidated Statement of Stockholders' Equity (Parenthetical) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended	7 Months Ended	12 Months Ended
	Mar. 31, 2012	Dec. 31, 2008	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Price per share of common stock issued for cash		$ 2.37		$ 2.60	$ 4.68
Price per share of common stock issued during conversion of short term borrowings					$ 2.96
Price per share of employee stock options exercised				$ 2.37	$ 2.37
Offering costs (in dollars)				$ 29.2
Price per share of common stock issued for investment	$ 31.218
Price per share of common stock based on a set dollar amount		$ 2.24
Price per share of common stock issued for noncontrolling interest			$ 45.60
Price per share on sale of Series A mandatory convertible preferred stock			$ 100.00
Common Stock
Price per share of stock sold				$ 14.00

XML

Income Taxes (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2012
Income Taxes
Net income since the Corporate Reorganization	$ 71.9
Stock based compensation expense, which is a permanent difference between income for financial reporting and tax purposes	31.9
Net deferred income tax liabilities	16.5
Deferred charges and income tax payable due to net tax effect of the elimination in consolidation of all intercompany balances and transactions	$ 6.9

XML

Inventory (Tables)

3 Months Ended

Mar. 31, 2012

Inventory

Schedule of inventory

	March 31, 2012		December 31, 2011
Current:
Concentrate stockpiles	$	1,832	$	3,704
Raw materials		33,540		44,770
Work in process		14,099		16,602
Finished goods		58,991		45,045
Materials and supplies		2,025		1,822
Total current	$	110,487	$	111,943
Long-term:
Concentrate stockpiles	$	1,867	$	1,144
Raw materials		8,328		3,186
Finished goods		5		32
Total long-term	$	10,200	$	4,362

XML

Commitments and Contingencies (Details 3) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012 jurisdictions	Feb. 29, 2012 lawsuit
Reclamation Surety Bonds
Surety bonds placed to secure the closure and reclamation obligations	$ 28.8
Purported class action and derivative lawsuits
Number of stockholder derivative lawsuits		7
Number of different jurisdictions in which lawsuits have been filed	3
Number of jurisdictions where defendants have filed a motion in each case seeking to consolidate derivative actions	1
Employees covered by collective bargaining agreement under facility | Workforce | Molycorp Silmet
Labor Contract
Number of employees	174
Concentration risk (as a percent)	30.00%
Employees covered by collective bargaining agreement under facility | Workforce | Molycorp Mountain Pass facility
Labor Contract
Number of employees	168
Concentration risk (as a percent)	57.00%

XML

Stockholders' Equity

3 Months Ended

Mar. 31, 2012

Stockholders' Equity

Stockholders' Equity

(15) Stockholders' Equity

        At March 31, 2012 and December 31, 2011, the Company had 96,396,043 and 83,896,043 shares of common stock outstanding, respectively, and 2,070,00 shares of 5.50% Series A Mandatory Convertible Preferred Stock ("Convertible Preferred Stock") outstanding.

        On March 8, 2012, Molibdenos y Metales S.A. ("Molymet"), the world's largest processor of molybdenum and rhenium, headquartered in Santiago, Chile, purchased 12.5 million shares of the Company's common stock for $390.1 million, net of stock issuance costs of $0.1 million, at a purchase price of $31.218 per share, which price was determined based on the average daily volume weighted average price of the Company's common stock on The New York Stock Exchange for the 20 consecutive trading days immediately preceding the date of the agreement, plus a 10% premium. Pursuant to this investment, Molymet acquired the right to nominate a member of the Company's Board of Directors for so long as Molymet owns a certain percentage of the Company's common stock.

        In February 2012, the Company declared a cash dividend of $1.375 per share on the Convertible Preferred Stock. The aggregate dividend of $2.8 million was paid on March 1, 2012 to holders of record at the close of business on February 15, 2012.

XML

Property, Plant and Equipment, net (Tables)

3 Months Ended

Mar. 31, 2012

Property, Plant and Equipment, net

Schedule of property, plant and equipment

	March 31, 2012			December 31, 2011
Land	$	11,350		$	11,059
Land improvements		15,912			15,748
Buildings and improvements		26,376			23,677
Plant and equipment		85,752			68,441
Vehicles		1,548			1,235
Computer software		4,425			3,002
Furniture and fixtures		635			464
Construction in progress		683,860			436,547
Mineral properties		24,790			24,692
Property, plant and equipment at cost		854,648			584,865
Less accumulated depreciation		(26,932	)		(23,237	)
Property, plant and equipment, net	$	827,716		$	561,628

XML

Stock-Based Compensation

3 Months Ended

Mar. 31, 2012

Stock-Based Compensation

Stock-Based Compensation

(17) Stock-Based Compensation

        On March 1, 2012, certain of the non-employee directors of the Company elected to convert a portion of their quarterly fees into restricted stock units ("RSUs") based on the Company's common stock price on that day. These RSUs are fully vested because they relate to services already rendered by the non-employee directors. The same non-employee directors received additional RSUs as matching contributions by the Company equal to 25% of the converted RSUs. The matching RSUs vest on the third anniversary of the grant date.

        On February 28, 2012, the Company granted RSUs and performance-based restricted stock units ("PBRSUs") to the Company's named executive officers and certain employees under the 2010 Equity and Performance Incentive Plan. The RSUs vest on the third anniversary of the grant date. The PBRSUs will vest with respect to between 0% and 150% on the basis of the achievement of certain management objectives measured by specified levels of total shareholder return relative to a defined index group over the performance period from January 1, 2012 through December 31, 2014, or upon the occurrence of certain change of control or termination events.

        On February 2, 2012, certain named executive officers and other employees of the Company elected to convert a portion of their 2011 annual cash bonuses into RSUs. These RSUs are fully vested because they relate to services already rendered by the grantees. The conversion of the 2011 annual bonuses into RSUs resulted into an increase in Additional Paid-In Capital of $0.6 million. The same named executive officers and other employees received additional RSUs as matching contribution by the Company equal to 25% of the converted RSUs. The matching RSUs vest on the third anniversary of the grant date.

        The grant-date fair value of RSUs is determined using the Company's common stock price on the date of grant and is recognized as stock-based compensation expense on a straight-line basis over the three-year vesting period for the awards that are expected to vest.

        The grant-date fair value of PBRSUs is determined using a lattice approach that incorporates a Monte Carlo simulation model. The compensation cost associated with the PBRSUs is recognized straight-line over the performance period for the awards that are expected to vest, even if the market conditions are never satisfied.

        The following tables summarize the activity related to stock-based awards during the first quarter of 2012:

PBRSUs	Number of Shares		Weighted Average Grant-Date Fair Value
Unvested at January 1, 2012		—		—
Granted		45,553	$	30.33
Forfeited		—		—
Vested		—		—
Unvested at March 31, 2012		45,553	$	30.33

RSUs	Number of Shares			Weighted Average Grant-Date Fair Value
Unvested at January 1, 2012		78,544		$	56.55
Granted		188,844		$	26.43
Forfeited		—			—
Vested*		(20,683	)	$	29.06
Unvested at March 31, 2012		246,705		$	35.80

*

Represents deferral and conversion of a portion of fees payable to certain non-employee directors of the Company, and deferral and conversion of a portion of the 2011 annual cash bonuses paid to certain executive officers and other employees of the Company.

RSAs	Number of Shares			Weighted Average Grant-Date Fair Value
Unvested at January 1, 2012		48,924		$	40.20
Granted		—			—
Forfeited		(221	)	$	48.87
Vested		—			—
Unvested at March 31, 2012		48,703		$	40.16

        The following tables summarize the activity related to stock options during the first quarter of 2012:

	March 31, 2012
Stock Options	Number of Shares		Weighted Average Exercise Price
Outstanding at January 1, 2012		52,819	$	48.87
Granted		—		—
Exercised		—		—
Forfeited and expired		—		—
Outstanding at March 31, 2012		52,819	$	48.87
Options exercisable at March 31, 2012		17,606	$	48.87

        The total stock-based compensation associated with all equity awards was $0.8 million, $2.9 million and $34.4 million for the three months ended March 31, 2012 and 2011, and for the period from June 12, 2008 (inception) through March 31, 2012, respectively.

XML

Net Change in Operating Assets and Liabilities (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		46 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Mar. 31, 2012
Decrease (increase) in operating assets:
Accounts receivable	$ 25,408	$ (1,160)	$ (44,368)
Inventory	(4,442)	(1,175)	(82,654)
Prepaid expenses and other assets	382	(874)	(7,004)
Increase (decrease) in operating liabilities:
Accounts payable	(13,924)	2,803	6,494
Prepaid income taxes	1,560		(16,272)
Asset retirement obligation		(165)	(2,049)
Accrued expenses	(4,605)	2,074	8,032
Net change in operating assets and liabilities	$ 4,379	$ 1,503	$ (137,821)

XML

Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended		46 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Mar. 31, 2012
Cash flows from operating activities:
Net (loss) income	$ (3,478)	$ (2,198)	$ 21,421
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation, amortization and accretion	3,836	2,334	32,751
Deferred income tax benefit	(3,725)		(801)
Inventory write-downs	6,563	630	32,356
Stock-based compensation expense	825	2,934	34,626
Foreign currency transaction losses, net	(1,668)		3,747
Unrealized loss on derivatives	6,641		6,643
Allowance for doubtful accounts	2,500		2,500
Other operating adjustments and write-downs	154		5,141
Net change in operating assets and liabilities (Note 21)	4,379	1,503	(137,821)
Net cash provided by operating activities	16,027	5,203	563
Cash flows from investing activities:
Acquisition of the Molycorp Mountain Pass facility			(82,150)
Cash paid in connection with acquisitions, net of cash acquired			(30,023)
Investment in joint venture	(3,836)		(3,836)
Cash paid to acquire non-marketable securities			(20,000)
Deposits	(459)	(1,500)	(23,762)
Capital expenditures	(206,463)	(26,345)	(549,378)
Other investing activities	2		9,521
Net cash used in investing activities	(210,756)	(27,845)	(699,628)
Cash flows provided by financing activities:
Capital contributions	390,225		515,229
Repayments of short-term borrowings-related party	(870)	(935)	(5,127)
Repayments of debt	(777)		(5,205)
Net proceeds from sale of common stock in conjunction with the initial public offering			378,633
Net proceeds from sale of preferred stock		199,642	199,642
Net proceeds from sale of convertible notes			223,100
Payments of preferred dividends	(2,846)		(11,861)
Proceeds from short-term borrowings-related party			11,645
Proceeds from debt			5,131
Other financing activities	(132)		34
Net cash provided by financing activities	385,600	198,707	1,311,221
Effect of exchange rate changes on cash	68		(2,362)
Net change in cash and cash equivalents	190,939	176,065	609,794
Cash and cash equivalents at beginning of the period	418,855	316,430
Cash and cash equivalents at end of period	$ 609,794	$ 492,495	$ 609,794

XML

Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Mar. 31, 2012	Dec. 31, 2011
Condensed Consolidated Balance Sheets
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	350,000,000	350,000,000
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000

XML

Acquisitions

3 Months Ended

Mar. 31, 2012

Acquisitions

Acquisitions

(10) Acquisitions

        The following table summarizes the purchase prices and opening balance sheets for the acquisition of 90.023% controlling interest in Molycorp Silmet on April 1, 2011 and of MMA on April 15, 2011 (in thousands):

Effective acquisition date for financial reporting purposes:	Molycorp Silmet April 1, 2011			MMA April 15, 2011
Purchase consideration:
Cash consideration	$	9,021		$	17,500
Fair value of common stock		72,653			—
Total purchase consideration	$	81,674		$	17,500
The fair values of the assets and liabilities acquired:
Cash	$	105		$	6,395
Accounts receivable and other current assets		8,626			5,474
Inventory		37,404			11,327
Property and equipment, net		63,393			4,512
Intangible assets subject to amortization		2,669			—
Goodwill		1,455			1,977
Liabilities		(19,974	)		(8,989	)
Deferred tax liabilities		—			(3,196	)
Long-term debt		(3,184	)		—
Noncontrolling interest		(8,820	)		—
Total purchase consideration	$	81,674		$	17,500

        The fair value of the accounts receivable acquired includes trade receivables of $5.0 million for Molycorp Silmet and $4.9 million for MMA. These trade receivables were collected by December 31, 2011. Molycorp Silmet's intangible assets subject to amortization relate primarily to customer relationships with a weighted average useful life of 15 years. Goodwill associated with the Molycorp Silmet acquisition arose primarily because of the acquired workforce. Goodwill associated with the MMA acquisition arose primarily because of the requirement to record a deferred tax liability for the difference between the assigned values and the tax basis of assets acquired and liabilities assumed at amounts that do not reflect fair value. The goodwill is not amortized and is not deductible for tax purposes. The fair value of the noncontrolling interest in Molycorp Silmet as of April 1, 2011 was valued using a combination of the market approach and income approach.

        The pro forma revenues, earnings and earnings per share of the Company for the first quarter of 2011 assuming the acquisition of Molycorp Silmet and MMA occurred on January 1, 2011, are as follows:

(In thousands, except per share amounts)	Revenue		Net Income (loss)		Net Income (loss) Attributable To Molycorp		EPS Basic
Unaudited pro forma January 1, 2011 to March 31, 2011 (combined entity)	$	59,734	$	4,916	$	4,623	$	0.04

        The supplemental pro forma amounts are not necessarily indicative of the operating results that would have occurred if these acquisitions had taken place on January 1, 2011.

        The unaudited pro forma earnings of the combined entity were adjusted to exclude $1.1 million of purchase price variance MMA capitalized during the first quarter of 2011. This pro forma adjustment is based on currently available information and certain assumptions that management believes are reasonable.

Molycorp Silmet

        On April 1, 2011, Molycorp acquired 80% of the outstanding shares of Molycorp Silmet from AS Silmet Grupp in exchange for 1,593,419 shares of Molycorp common stock contractually valued at $80.0 million based on the average closing price of the Company's common stock as reported by The New York Stock Exchange for the 20 consecutive trading days immediately preceding April 1, 2011, the acquisition date.

        Generally, the acquisition-date fair value of shares of common stock transferred by the acquirer is the closing price of that stock on the same date adjusted by a discount that a market participant would require as a result of any restrictions on the sale or transferability of the stock. The fair value of common stock of $72.7 million disclosed in the table above is based on the closing price of the Company's common stock on the acquisition date, net of an estimated discount of 23% that a market participant would require given that issuance of the shares of common stock Molycorp transferred in consideration to AS Silmet Grupp was not registered under the Securities Act of 1933 and such shares were subject to certain lock-up provisions, which limited AS Silmet Grupp's ability to sell these shares. AS Silmet Grupp retained a 9.977% ownership interest in Molycorp Silmet on the acquisition date; Molycorp acquired the other 10.023% from Treibacher Industrie AG for $9.0 million in cash also on April 1, 2011.

        On October 24, 2011, the Company acquired the remaining 9.977% ownership interest in Molycorp Silmet for $10.0 million in cash, which resulted in an adjustment to Additional Paid-In Capital of $0.4 million for the difference between the consideration paid and the carrying value of the noncontrolling interest at October 24, 2011.

        The Molycorp Silmet acquisition provides Molycorp with a European base of operations and increases the Company's yearly REOs production capacity by approximately 3,000 mt. Molycorp Silmet sources a portion of rare earth feed stocks for production of its products primarily from the Molycorp Mountain Pass facility. The main focus of Molycorp Silmet is on the production of REOs and metals, including didymium metal, a critical component in the manufacture of NdFeB permanent rare earth magnets. Molycorp Silmet's manufacturing operation is located in Sillamäe, Estonia.

MMA

        On April 15, 2011, Molycorp completed the acquisition from Santoku Corporation ("Santoku") of all the issued and outstanding shares of capital stock of Santoku America, Inc., which is now known as MMA, an Arizona based corporation, in an all-cash transaction for $17.5 million. The acquisition provides Molycorp with access to certain intellectual properties relative to the development, processing and manufacturing of neodymium and samarium magnet alloy products. As part of the stock purchase agreement, Santoku will provide consulting services to Molycorp for the purpose of maintaining and enhancing the quality of MMA's products. Molycorp and Santoku also entered into five-year marketing and distribution agreements for the sale and distribution of neodymium and samarium magnet alloy products produced by each party. Additionally, the parties entered into a rare earth products purchase and supply agreement through which MMA will supply Santoku with certain rare earth alloys for a two-year period at prices equal to the feedstock cost plus the applicable product premium as such terms are defined in the agreement.

XML

Document and Entity Information	3 Months Ended
	Mar. 31, 2012	May 09, 2012
Document and Entity Information
Entity Registrant Name	Molycorp, Inc.
Entity Central Index Key	0001489137
Document Type	10-Q
Document Period End Date	Mar. 31, 2012
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		96,395,822
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q1

XML

Accrued Expenses

3 Months Ended

Mar. 31, 2012

Accrued Expenses

Accrued Expenses

(11) Accrued Expenses

        Accrued expenses at March 31, 2012 and December 31, 2011 consisted of the following (in thousands):

	March 31, 2012		December 31, 2011
Defined contribution plan	$	782	$	1,088
Accrued payroll and related benefits		3,053		3,024
Sales and use tax		1,272		1,367
Bonus accrual		582		4,845
Interest payable		2,192		345
Unrealized loss on derivatives		6,641		265
Other accrued expenses		980		1,964
Total accrued expenses	$	15,502	$	12,898

XML

Condensed Consolidated Statements of Operations and Comprehensive Income (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended				46 Months Ended
	Mar. 31, 2012		Mar. 31, 2011		Mar. 31, 2012
Sales	$ 84,470		$ 26,261		$ 525,688
Operating costs and expenses:
Cost of goods sold	(53,443)		(16,677)		(303,736)
Selling, general and administrative	(31,214)		(11,238)		(158,778)
Depreciation and amortization	(107)		(83)		(1,369)
Accretion expense	(251)		(234)		(3,374)
Operating (loss) income	(545)		(1,971)		58,431
Other income (expense):
Other expense	(6,578)		(168)		(6,341)
Foreign currency transaction gains (losses), net	1,604				(3,811)
Interest income (expense), net	85		140		(238)
Total other income (expense)	(4,889)		(28)		(10,390)
(Loss) income before income taxes and equity earnings	(5,434)		(1,999)		48,041
Income tax benefit (expense)	2,183		(199)		(26,393)
Equity in results of affiliates	(227)				(227)
Net (loss) income	(3,478)		(2,198)		21,421
Net (loss) income	(3,478)		(2,198)		21,421
Other comprehensive income:
Foreign currency translation adjustments	2,530				(5,951)
Comprehensive (loss) income	$ (948)		$ (2,198)		$ 15,470
Weighted average shares outstanding (Common shares)
Basic (in shares)	87,006,460	[1]	82,253,700	[1]	60,086,657	[1]
Diluted (in shares)	87,006,460	[1]	82,253,700	[1]	60,087,803	[1]
(Loss) income per share of common stock (Note 16):
Basic (in dollars per share)	$ (0.07)		$ (0.04)		$ 0.14
Diluted (in dollars per share)	$ (0.07)		$ (0.04)		$ 0.14

[1] Weighted average shares outstanding include the retroactive treatment of exchange ratios for conversion of Class A common stock and Class B common stock to common stock in conjunction with the initial public offering.

XML

Deposits

3 Months Ended

Mar. 31, 2012

Deposits

Deposits

(5) Deposits

        The Company had $23.3 million in deposits reported as non-current assets at March 31, 2012 and December 31, 2011. The deposits consist of $20.6 million under an escrow arrangement for the Company's facilities agreement with Kern River Gas Transmission Company, $1.5 million related to the Company's construction insurance program and $1.2 million related primarily to other restricted cash requirements.

XML

Inventory

3 Months Ended

Mar. 31, 2012

Inventory

Inventory

(4) Inventory

        At March 31, 2012 and December 31, 2011, inventory consisted of the following (in thousands):

	March 31, 2012		December 31, 2011
Current:
Concentrate stockpiles	$	1,832	$	3,704
Raw materials		33,540		44,770
Work in process		14,099		16,602
Finished goods		58,991		45,045
Materials and supplies		2,025		1,822
Total current	$	110,487	$	111,943
Long-term:
Concentrate stockpiles	$	1,867	$	1,144
Raw materials		8,328		3,186
Finished goods		5		32
Total long-term	$	10,200	$	4,362

Assessment of normal production levels

        For the three months ended March 31, 2012 and 2011, and cumulatively for the period from June 12, 2008 (Inception) through March 31, 2012, Molycorp determined that $3.0 million, $2.6 million and $20.8 million, respectively, of production costs would have been allocated to additional production, assuming Molycorp had been operating at normal production ranges. As a result, these costs were excluded from inventory and instead expensed during the applicable periods. The assessment of normal production levels is judgmental and is unique to each quarter.

Write-downs of inventory

        For the three months ended March 31, 2012 and 2011, and cumulatively for the period from June 12, 2008 (Inception) through March 31, 2012, the Company recognized write-downs of $6.6 million, $0.6 million and $30.4 million, respectively, as a result of production or purchase costs in excess of net realizable value. In addition, the Company recognized write-downs of work-in-process and stockpile inventory totaling zero, $1.3 million and $5.0 million for the three months ended March 31, 2012 and 2011, and cumulatively for the period from June 12, 2008 (Inception) through March 31, 2012, respectively, based on adjustments to estimated REOs quantities.

XML

Earnings (Loss) per Share

3 Months Ended

Mar. 31, 2012

Earnings (Loss) per Share

Earnings (Loss) per Share

(16) Earnings (Loss) per Share

        For the three months ended March 31, 2012 and 2011, and cumulatively for the period from June 12, 2008 (Inception) through March 31, 2012, the cumulative undeclared and paid dividends on the Convertible Preferred Stock for the period were subtracted from net (loss) income attributable to Molycorp stockholders for the period for the purpose of computing the basic and diluted earnings per share. The cumulative undeclared and paid dividends on the Convertible Preferred Stock for the three months ended March 31, 2011 was revised for an immaterial amount that had no impact on the basic and diluted loss per share for that period.

(In thousands, except share and per share amounts)	Three Months Ended March 31, 2012			Three Months Ended March 31, 2011			Total from June 12, 2008 (Inception) Through March 31, 2012
Net (loss) income attributable to Molycorp stockholders	$	(3,478	)	$	(2,198	)	$	21,421
Cumulative undeclared and paid dividends on Convertible Preferred Stock		(2,846	)		(1,423	)		(12,808	)
(Loss) income attributable to common stockholders		(6,324	)		(3,621	)		8,613
Weighted average common shares outstanding—basic		87,006,460			82,253,700			60,086,657
Basic (loss) income per share	$	(0.07	)	$	(0.04	)	$	0.14
Weighted average common shares outstanding—diluted		87,006,460			82,253,700			60,087,803
Diluted (loss) income per share	$	(0.07	)	$	(0.04	)	$	0.14

        Diluted earnings per share reflect the dilutive impact of potential common stock and unvested restricted shares of common stock in the weighted average number of common shares outstanding during the period, if dilutive. For this purpose, the "treasury stock method" and "if-converted method," as applicable, are used.

        Under the treasury stock method, assumed proceeds upon the exercise of stock options are considered to be used to purchase common stock at the average market price of the shares during the period. Also under the treasury stock method, fixed awards and nonvested shares, such as restricted stock, are deemed options for purposes of computing diluted earnings per share. As of March 31, 2012 and 2011, all potential common stock under the treasury stock method were antidilutive in nature; consequently, the Company does not have any adjustments between earnings per share and diluted earnings per share related to stock options and restricted stock awards.

        In applying the if-converted method, conversion is not assumed for purposes of computing diluted earnings per share if the effect would be antidilutive. Convertible preferred stock (such as the Convertible Preferred Stock) is antidilutive whenever the amount of the dividend declared in or accumulated for the current period including the deemed dividend in the period from a beneficial conversion feature per common share obtainable on conversion exceeds basic earnings per share. The Convertible Preferred Stock was antidilutive as of March 31, 2012 and 2011. Also under the if-converted method, convertible debt (such as the Convertible Notes) is antidilutive whenever its interest including any deemed interest from a beneficial conversion feature and nondiscretionary adjustments, net of tax, per common share obtainable on conversion exceeds basic earnings per share. As of March 31, 2012, the Convertible Notes were antidilutive.

XML

Asset Retirement Obligation

3 Months Ended

Mar. 31, 2012

Asset Retirement Obligation

Asset Retirement Obligation

(12) Asset Retirement Obligation

        The following table presents the activity in the Company's asset retirement obligation for the three months ended March 31, 2012, and for the year ended December 31, 2011 (in thousands):

	Three Months Ended March 31, 2012			Year Ended December 31, 2011
Balance at beginning of period	$	15,541		$	12,471
Obligations settled		(124	)		(1,030	)
Accretion expense		251			955
Revisions in estimated cash flows		1,919			2,508
Gain on settlement		—			637
Balance at end of period	$	17,587		$	15,541

        The Company is required to provide the applicable governmental agencies with financial assurances relating to its closure and reclamation obligations. At March 31, 2012, the Company had financial assurance requirements of $28.8 million, which were satisfied with surety bonds placed with California state and regional agencies.

XML

Intangible Assets

3 Months Ended

Mar. 31, 2012

Intangible Assets

Intangible Assets

(8) Intangible Assets

        At March 31, 2012 and December 31, 2011, amortizable intangible assets consisted of the following (in thousands):

	March 31, 2012			December 31, 2011
Trade name	$	786		$	786
Customer relationships		2,221			2,153
Other		533			516
Gross carrying amount		3,540			3,455
Less accumulated amortization		(456	)		(383	)
Net carrying amount	$	3,084		$	3,072

        The change in the gross carrying amount of customer relationships and other intangible assets is attributable to the fluctuation in the period of the U.S. dollar against the Euro, which is the functional currency of Molycorp Silmet.

XML

Stockholders' Equity (Details) (USD $)	3 Months Ended	7 Months Ended	12 Months Ended		46 Months Ended	3 Months Ended			1 Months Ended	3 Months Ended
	Mar. 31, 2012	Dec. 31, 2008	Dec. 31, 2010	Dec. 31, 2009	Mar. 31, 2012	Mar. 31, 2012 Molymet D	Mar. 31, 2012 Common Stock	Dec. 31, 2011 Common Stock	Feb. 29, 2012 Series A Mandatory Convertible Preferred Stock	Mar. 31, 2012 Series A Mandatory Convertible Preferred Stock	Dec. 31, 2011 Series A Mandatory Convertible Preferred Stock
Stockholders' Equity
Shares outstanding							96,396,043	83,896,043		2,070,000	2,070,000
Dividend rate (as a percent)										5.50%
Cash dividend declared (in dollars per share)									$ 1.375
Cash dividend declared and paid (in dollars)	$ 2,846,000				$ 11,861,000					$ 2,800,000
Issuance of shares for investment (in shares)						12,500,000
Issuance of shares for investment (in dollars)		92,000,000	15,000,000	18,004,000		390,100,000
Stock issuance costs			$ 29,200,000			$ 100,000
Price per share of common stock issued for investment		$ 2.37	$ 2.60	$ 4.68		$ 31.218
Number of consecutive trading days to calculate common stock price						20
Premium percentage added to common stock price						10.00%

XML

Property, Plant and Equipment, net

3 Months Ended

Mar. 31, 2012

Property, Plant and Equipment, net

Property, Plant and Equipment, net

(6) Property, Plant and Equipment, net

        The Company capitalized $265.8 million and $416.8 million in plant modernization and other capital costs for the three months ended March 31, 2012 and the year ended December 31, 2011, respectively. These amounts include capitalized interest of $3.8 million and $7.5 million, respectively.

        Capital expenditures under the Company's initial modernization and expansion efforts, including the accelerated start-up of the Molycorp Mountain Pass facility ("Project Phoenix Phase 1"), and the Company's second phase capacity expansion plan ("Project Phoenix Phase 2"), and other capital projects related to operations at Molycorp Mountain Pass totaled $253.6 million and $388.5 million for the three months ended March 31, 2012 and the year ended December 31, 2011, respectively, on an accrual basis and excluding capitalized interest.

        At March 31, 2012 and December 31, 2011, property, plant and equipment consisted of the following (in thousands):

	March 31, 2012			December 31, 2011
Land	$	11,350		$	11,059
Land improvements		15,912			15,748
Buildings and improvements		26,376			23,677
Plant and equipment		85,752			68,441
Vehicles		1,548			1,235
Computer software		4,425			3,002
Furniture and fixtures		635			464
Construction in progress		683,860			436,547
Mineral properties		24,790			24,692
Property, plant and equipment at cost		854,648			584,865
Less accumulated depreciation		(26,932	)		(23,237	)
Property, plant and equipment, net	$	827,716		$	561,628

XML

Mineral Properties and Development Costs

3 Months Ended

Mar. 31, 2012

Mineral Properties and Development Costs

Mineral Properties and Development Costs

(7) Mineral Properties and Development Costs

        Mineral properties and development costs, which are referred to collectively as mineral properties, include acquisition costs, drilling costs, and the cost of other development work, all of which are capitalized. The Company depletes mineral properties using the units of production method over estimated proven and probable reserves. For the three months ended March 31, 2012, the Company capitalized $21,000 of depletion costs in work-in-process inventory related to the reserves that were mined and crushed during this period.

XML

Investments

3 Months Ended

Mar. 31, 2012

Investments

Investments

(9) Investments

Boulder Wind Power, Inc.

        On September 13, 2011, the Company invested $20.0 million into Boulder Wind Power, Inc. Series B convertible preferred stock, which is accounted for at cost. At March 31, 2012, the fair value of this investment was not estimated as there were no identified events or changes in circumstances that may have had a significant adverse effect on the fair value of the investment.

Intermetallics Japan Joint Venture

        On November 28, 2011, Molycorp, Daido Steel Co., Ltd. ("Daido") and Mitsubishi Corporation ("Mitsubishi") entered into a preliminary shareholders agreement for the purpose of establishing a new private company, Intermetallics Japan ("IMJ"), to manufacture sintered neodymium-iron-boron ("NdFeB") permanent rare earth magnets. The capital contribution ratio of the newly formed company is 30.0% by Molycorp, 35.5% by Daido and 34.5% by Mitsubishi. According to the definitive shareholders agreement, which was signed in January 2012, Molycorp will contribute, upon achievement of certain milestones and subject to the approval of Molycorp's Board of Directors, Japanese Yen (JPY) 2.5 billion in cash (or approximately $30.4 million based on the JPY/ U.S. dollar exchange rate at March 31, 2012), in exchange for ordinary shares of IMJ over a period of twelve months. The actual remittance amounts will vary depending on the future exchange rate between the U.S. dollar and the Japanese Yen, and the achievement of certain milestones by the joint venture.

        On January 11, 2012, the Company made its first contribution of $3.8 million to IMJ. The Company accounts for this investment under the equity method because it has the ability to exercise significant influence over the operating and financial policies of IMJ, as evidenced by Molycorp's ownership share and its proportional voting rights and representation in the Board of Directors of IMJ. The condensed consolidated statement of operations and comprehensive income for the three months ended March 31, 2012 includes a loss of $0.2 million from the Company's proportional ownership in IMJ.

XML

Commitments and Contingencies (Details 2) (Molycorp Mountain Pass facility, USD $) In Millions, unless otherwise specified		12 Months Ended
	Mar. 31, 2012	Dec. 31, 2011 Potential Environmental Obligations liner	Mar. 31, 2012 Project Phoenix Phase 1 and Project Phoenix Phase 2
Plant Modernization and Expansion Commitments
Estimated future payments for commitments due in one year			$ 336.0
Estimated future payments for commitments due in one to two years	384.7
Potential Environmental Obligations
Number of liner defects		3
Remediation costs, low estimate		2.4
Remediation costs, high estimate		$ 4.6

XML

Concentrations (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		46 Months Ended		3 Months Ended							3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Mar. 31, 2012	Mar. 31, 2012 Sales MMA NdFeB alloys	Mar. 31, 2012 Sales Molycorp Mountain Pass facility	Mar. 31, 2012 Sales Molycorp Mountain Pass facility Lanthanum products	Mar. 31, 2011 Sales Molycorp Mountain Pass facility Lanthanum products	Mar. 31, 2012 Sales Molycorp Mountain Pass facility Cerium products	Mar. 31, 2011 Sales Molycorp Mountain Pass facility Cerium products	Mar. 31, 2012 Sales Molycorp Mountain Pass facility Didymium, Neodymium and Praseodymium products	Mar. 31, 2011 Sales Molycorp Mountain Pass facility Didymium, Neodymium and Praseodymium products	Mar. 31, 2012 Sales Limited Number of Customers customer	Mar. 31, 2012 Sales Limited Number of Customers Molycorp Silmet customer	Mar. 31, 2012 Sales Limited Number of Customers MMA customer	Jun. 30, 2012 Sales Limited Number of Customers MMA Customer one	Mar. 31, 2012 Sales Limited Number of Customers Molycorp Mountain Pass facility customer	Mar. 31, 2011 Sales Limited Number of Customers Molycorp Mountain Pass facility customer	Mar. 31, 2012 Sales Limited Number of Customers Molycorp Mountain Pass facility Customer one	Mar. 31, 2011 Sales Limited Number of Customers Molycorp Mountain Pass facility Customer one	Mar. 31, 2012 Sales Limited Number of Customers Molycorp Mountain Pass facility Customer two	Mar. 31, 2011 Sales Limited Number of Customers Molycorp Mountain Pass facility Customer two	Mar. 31, 2011 Sales Limited Number of Customers Molycorp Mountain Pass facility Customer three	Mar. 31, 2012 Sales Limited Number of Products Molycorp Silmet product
Concentrations
Percentage of sales to total sales threshold					10.00%							10.00%
Percentage of sales				19.00%		46.00%	44.00%	1.00%	34.00%	53.00%	18.00%	20.00%	57.00%	88.00%		98.00%
Percentage of entity's sales															20.00%
Number of rare metal products																							2
Sales, net of intercompany transactions	$ 84,470	$ 26,261	$ 525,688											$ 16,600				$ 20,400	$ 7,800	$ 17,200	$ 6,200	$ 5,800
Number of customers representing a specified percentage of sales												2	4			3	3
Number of customers representing a specified percentage of sales, net of intercompany sales														1
Percentage of sales of total sales																	75.00%

XML

Commitments and Contingencies (Details) (Office space, trailers and certain equipment, USD $) In Millions, unless otherwise specified	Mar. 31, 2012
Office space, trailers and certain equipment
Remaining annual minimum payments under operating leases
Remainder of 2012	$ 1.5
2013	0.6
2014	0.5
2015	0.5
2016	0.5
Total remaining annual minimum payments under operating leases	$ 3.6

XML

Segment Information (Tables)

3 Months Ended

Mar. 31, 2012

Segment Information

Schedule of segment information

Three Months Ended March 31, 2012 (In thousands)	Molycorp Mountain Pass			Molycorp Silmet			MMA			Other(a)			Eliminations(b)			Total Molycorp, Inc.
Sales:
External	$	44,478		$	21,036		$	18,956		$	—		$	—		$	84,470
Intersegment		1,832			3,210			—						(5,042	)		—
Total sales		46,310			24,246			18,956
Cost of goods sold		(18,846	)		(34,774	)		(18,632	)		—			18,809			(53,443	)
Selling, general and administrative expenses		(29,079	)		(1,714	)		(457	)		(273	)		309			(31,214	)
Depreciation, amortization and accretion expense		(334	)		—			—			(24	)		—			(358	)
Operating (loss) income		(1,949	)		(12,242	)		(133	)		(297	)		14,076			(545	)
Other (expense) income		(6,444	)		1,579			(4	)		(20	)		—			(4,889	)
Loss before income taxes and equity earnings	$	(8,393	)	$	(10,663	)	$	(137	)	$	(317	)	$	14,076		$	(5,434	)
Total assets at March 31, 2012	$	1,675,653		$	100,499		$	24,313		$	630		$	(112,342	)	$	1,688,753
Capital expenditures (accrual basis excluding capitalized interest)	$	259,438		$	2,501		$	100		$	—		$	—		$	262,039

(a)

Includes expenses incurred by and capital invested in the sales office in Tokyo, Japan.

(b)

The $112,342 of total assets eliminations is comprised of $98,883 of intercompany investments and $13,459 of intercompany accounts receivable and profits in inventory. The $18,809 cost of goods sold elimination amount includes elimination of the intercompany gross profits as well as elimination of lower of cost or market adjustments related to the intercompany inventory.

XML

Property, Plant and Equipment, net (Details) (USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2012	Dec. 31, 2011
Property, plant and equipment
Plant modernization and other capital costs	$ 265,800,000	$ 416,800,000
Capitalized interest related to plant modernization and other capitalized costs	3,800,000	7,500,000
Capital expenditure on accrual basis	253,600,000	388,500,000
Property, plant and equipment at cost	854,648,000	584,865,000
Less accumulated depreciation	(26,932,000)	(23,237,000)
Property, plant and equipment, net	827,716,000	561,628,000
Land
Property, plant and equipment
Property, plant and equipment at cost	11,350,000	11,059,000
Land improvements
Property, plant and equipment
Property, plant and equipment at cost	15,912,000	15,748,000
Buildings and improvements
Property, plant and equipment
Property, plant and equipment at cost	26,376,000	23,677,000
Plant and equipment
Property, plant and equipment
Property, plant and equipment at cost	85,752,000	68,441,000
Vehicles
Property, plant and equipment
Property, plant and equipment at cost	1,548,000	1,235,000
Computer software
Property, plant and equipment
Property, plant and equipment at cost	4,425,000	3,002,000
Furniture and fixtures
Property, plant and equipment
Property, plant and equipment at cost	635,000	464,000
Construction in progress
Property, plant and equipment
Property, plant and equipment at cost	683,860,000	436,547,000
Mineral properties
Property, plant and equipment
Property, plant and equipment at cost	$ 24,790,000	$ 24,692,000

XML

Income Taxes

3 Months Ended

Mar. 31, 2012

Income Taxes

Income Taxes

(14) Income Taxes

        At March 31, 2012, the Company's net income of $71.9 million since the Corporate Reorganization included $31.9 million in certain stock-based compensation expense, which is a permanent difference between its income for financial reporting and tax purposes. Other permanent differences include legal and due diligence fees related to the acquisitions that were completed in April 2011, as well as costs related to the registration of common stock sold by certain stockholders in secondary offerings completed during the first and second quarters of 2011. Molycorp had net deferred income tax liabilities of $16.5 million as of March 31, 2012.

        Prior to the second quarter of 2011, Molycorp had a history of losses and, as a result, it recognized a full valuation allowance against its net deferred tax assets. As of March 31, 2012, Molycorp determined that it, more likely than not, will realize its deferred tax assets and concluded that no valuation allowance is required. In making this determination, management analyzed, among other things, the Company's recent history of earnings and cash flows, forecasts of future earnings, and the nature and timing of future deductions and benefits represented by the deferred tax assets and liabilities.

        The Company has undistributed earnings of its foreign subsidiary at March 31, 2012, for which deferred taxes have not been provided. Such earnings are considered indefinitely invested in the foreign subsidiary. If such earnings were repatriated, additional tax expense may result, although the calculation of such additional taxes is not practicable.

        The net tax effect of the elimination in consolidation of intercompany balances and transactions resulted in a deferred charge and income tax payable of $6.9 million at March 31, 2012.

XML

Concentrations

3 Months Ended

Mar. 31, 2012

Concentrations

Concentrations

(19) Concentrations

(a)    Limited Number of Products

Molycorp Mountain Pass

        Percentages of Molycorp Mountain Pass' revenue, net of intercompany sales, by product that accounted for more than 10% of consolidated sales in the first quarter of 2012 or 2011, were approximately as follows:

	March 31, 2012			March 31, 2011
Lanthanum products		46	%		44	%
Cerium products		1	%		34	%
Didymium, Neodymium and Praseodymium products		53	%		18	%

Molycorp Silmet

        The majority of sales from the Molycorp Silmet facility during the first quarter of 2012, net of intercompany sales, consisted of cerium, neodymium and praseodymium rare earth products, and two rare metal products, tantalum and niobium.

MMA

        The MMA facility sold primarily NdFeB alloys and samarium-cobalt alloys during the first quarter of 2012. MMA's sales of NdFeB alloys for the same period were approximately 19% of consolidated sales.

(b)    Limited Number of Customers

Molycorp Mountain Pass

        In the first quarter of 2012, Molycorp Mountain Pass' sales to two of its customers in excess of 10% of consolidated sales were $20.4 million and $17.2 million, respectively. Molycorp Mountain Pass' sales to three of its customers, net of intercompany sales, represented in total approximately 98% of Molycorp Mountain Pass' sales in same period.

        For the three months ended March 31, 2011, approximately 75% of Molycorp Mountain Pass' total sales were to three of its customers. Sales to these three customers were approximately $7.8 million, $6.2 million and $5.8 million, respectively.

Molycorp Silmet

        Sales to four of Molycorp Silmet's customers during the first quarter of 2012 represented, in aggregate, approximately 57% of Molycorp Silmet's sales for that period.

MMA

        MMA's sales to one of its customers for the three months ended March 31, 2012, were $16.6 million, or approximately 20% of the Company's consolidated sales, and approximately 88% of MMA's sales for that period.

XML

Inventory (Details) (USD $)	3 Months Ended		46 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Mar. 31, 2012	Dec. 31, 2011
Current:
Concentrate stockpiles	$ 1,832,000		$ 1,832,000	$ 3,704,000
Raw materials	33,540,000		33,540,000	44,770,000
Work in process	14,099,000		14,099,000	16,602,000
Finished goods	58,991,000		58,991,000	45,045,000
Materials and supplies	2,025,000		2,025,000	1,822,000
Total current	110,487,000		110,487,000	111,943,000
Long-term:
Concentrate stockpiles	1,867,000		1,867,000	1,144,000
Raw materials	8,328,000		8,328,000	3,186,000
Finished goods	5,000		5,000	32,000
Total long-term	10,200,000		10,200,000	4,362,000
Production costs that would have been allocated to additional tons produced, assuming operations at normal production rates	3,000,000	2,600,000	20,800,000
Write-down of inventory as a result of production or purchase costs in excess of net realizable value	6,600,000	600,000	30,400,000
Write-down of work-in-process inventory and stockpile based on estimated REO quantities		$ 1,300,000	$ 5,000,000

XML

Debt (Tables)

3 Months Ended

Mar. 31, 2012

Debt

Summary of the current and non-current portions of the debt outstanding

	March 31, 2012
	Current		Non-Current
Convertible Notes 3.25%, net of discount, due June 2016	$	—	$	192,793
Bank loans 2.69% - 3.88% due September 2012 - September 2017		1,383		5,124
Total debt	$	1,383	$	197,917

	December 31, 2011
	Current		Non-Current
Convertible Notes 3.25%, net of discount, due June 2016	$	—	$	190,877
Bank loans 2.69% - 3.88% due February 2012 - September 2017		1,516		5,668
Total debt	$	1,516	$	196,545

XML

Condensed Consolidated Statement of Stockholders' Equity (USD $) In Thousands, except Share data, unless otherwise specified	Total	Total Molycorp Stockholders	Common Stock	Series A Mandatory Convertible Preferred Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income	Surplus (Deficit) Accumulated During the Development Stage	Noncontrolling interest	Class A Common Stock
Balance at Jun. 12, 2008
Increase (Decrease) in Stockholders' Equity
Issuance of shares for cash on various dates at $2.60, $4.68, $2.37 per share in 2010, 2009, and 2008, respectively	$ 92,000	$ 92,000			$ 91,961				$ 39
Issuance of shares for cash on various dates at $2.60, $4.68, $2.37 per share in 2010, 2009, and 2008, respectively (in shares)									38,762,268
Stock-based compensation, at $2.24 per share based on a set dollar amount for November 6, 2008 (Note 17)	150	150			150
Stock-based compensation, at $2.24 per share based on a set dollar amount for November 6, 2008 (Note 17) (in shares)									66,957
Net (loss) income	(14,074)	(14,074)					(14,074)
Balance at Dec. 31, 2008	78,076	78,076			92,111		(14,074)		39
Balance (in shares) at Dec. 31, 2008									38,829,225
Increase (Decrease) in Stockholders' Equity
Issuance of shares for cash on various dates at $2.60, $4.68, $2.37 per share in 2010, 2009, and 2008, respectively	18,004	18,004			18,000				4
Issuance of shares for cash on various dates at $2.60, $4.68, $2.37 per share in 2010, 2009, and 2008, respectively (in shares)									3,844,858
Conversion of short term borrowings from member and related accrued interest in common shares on November 15, 2009 at $2.96 per share based on a contractual price	6,831	6,831			6,829				2
Conversion of short term borrowings from member and related accrued interest in common shares on November 15, 2009 at $2.96 per share based on a contractual price (in shares)									2,303,033
Exercise of employee options on February 1, 2010 and September 4, 2009 at $2.37 per share	50	50			50
Exercise of employee options on February 1, 2010 and September 4, 2009 at $2.37 per share (in shares)									21,069
Stock-based compensation, at $2.24 per share based on a set dollar amount for November 6, 2008 (Note 17)	241	241			241
Net (loss) income	(28,587)	(28,587)					(28,587)
Balance at Dec. 31, 2009	74,615	74,615			117,231		(42,661)		45
Balance (in shares) at Dec. 31, 2009									44,998,185
Increase (Decrease) in Stockholders' Equity
Issuance of shares for cash on various dates at $2.60, $4.68, $2.37 per share in 2010, 2009, and 2008, respectively	15,000	15,000			14,994				6
Issuance of shares for cash on various dates at $2.60, $4.68, $2.37 per share in 2010, 2009, and 2008, respectively (in shares)									5,767,670
Exercise of employee options on February 1, 2010 and September 4, 2009 at $2.37 per share	300	300			300
Exercise of employee options on February 1, 2010 and September 4, 2009 at $2.37 per share (in shares)									126,405
Conversion of Class A stock to common stock in conjunction with the IPO on August 3, 2010			51						(51)
Conversion of Class A stock to common stock in conjunction with the IPO on August 3, 2010 (in shares)			50,892,260						(50,892,260)
Sale of shares of common stock at $14.00 per share in IPO 2010, net of offering costs of $29.2 million	378,633	378,633	29		378,604
Sale of shares of common stock at $14.00 per share in IPO 2010, net of offering costs of $29.2 million (in shares)			29,128,700
Conversion of Class B stock to common stock in conjunction with the IPO on August 3, 2010	28,663	28,663	2		28,661
Conversion of Class B stock to common stock in conjunction with the IPO on August 3, 2010 (in shares)			2,232,740
Stock-based compensation, at $2.24 per share based on a set dollar amount for November 6, 2008 (Note 17)	76	76			76
Stock-based compensation, at $2.24 per share based on a set dollar amount for November 6, 2008 (Note 17) (in shares)			37,500
Net (loss) income	(50,774)	(50,774)					(50,774)
Balance at Dec. 31, 2010	446,513	446,513	82		539,866		(93,435)
Balance (in shares) at Dec. 31, 2010			82,291,200
Increase (Decrease) in Stockholders' Equity
Sale of Series A mandatory convertible preferred stock on February 16, 2011 at $100.00 per share, net of underwriting	199,642	199,642		2	199,640
Sale of Series A mandatory convertible preferred stock on February 16, 2011 at $100.00 per share, net of underwriting (in shares)				2,070,000
Stock-based compensation, at $2.24 per share based on a set dollar amount for November 6, 2008 (Note 17)	4,671	4,671			4,671
Stock-based compensation, at $2.24 per share based on a set dollar amount for November 6, 2008 (Note 17) (in shares)			11,424
Issuance of shares for interest in Molycorp Silmet on April 1, 2011 at $45.60 per share	81,475	72,655	2		72,653			8,820
Issuance of shares for interest in Molycorp Silmet on April 1, 2011 at $45.60 per share (in shares)			1,593,419
Component of convertible debt	36,227	36,227			36,227
Deferred taxes on component of convertible debt	(14,138)	(14,138)			(14,138)
Net (loss) income	118,334	117,526					117,526	808
Preferred dividends	(9,013)	(9,013)					(9,013)
Other comprehensive income	(8,481)	(8,058)				(8,058)		(423)
Acquisition of noncontrolling interest	(10,000)	(795)			(372)	(423)		(9,205)
Balance at Dec. 31, 2011	845,230	845,230	84	2	838,547	(8,481)	15,078
Balance (in shares) at Dec. 31, 2011			83,896,043	2,070,000
Increase (Decrease) in Stockholders' Equity
Stock-based compensation, at $2.24 per share based on a set dollar amount for November 6, 2008 (Note 17)	1,408	1,408			1,408
Issuance of shares for investment from Molymet on March 8, 2012 at $31.218 per share, net of stock issuance costs (Note 15)	390,093	390,093	12		390,081
Issuance of shares for investment from Molymet on March 8, 2012 at $31.218 per share, net of stock issuance costs (Note 15) (in shares)			12,500,000
Net (loss) income	(3,478)	(3,478)					(3,478)
Preferred dividends	(2,846)	(2,846)					(2,846)
Other comprehensive income	2,530	2,530				2,530
Balance at Mar. 31, 2012	$ 1,232,937	$ 1,232,937	$ 96	$ 2	$ 1,230,036	$ (5,951)	$ 8,754
Balance (in shares) at Mar. 31, 2012			96,396,043	2,070,000

XML

Trade Accounts Receivable

3 Months Ended

Mar. 31, 2012

Trade Accounts Receivable

Trade Accounts Receivable

(3) Trade Accounts Receivable

        Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company reviews the need for an allowance for doubtful accounts on a quarterly basis. At March 31, 2012 and December 31, 2011, the allowance for doubtful accounts was $2.5 million and zero, respectively.

XML

Debt (Details) (USD $)	Mar. 31, 2012	Dec. 31, 2011
Debt
Current portion of debt outstanding	$ 1,383,000	$ 1,516,000
Non-Current portion of debt outstanding	197,917,000	196,545,000
Scheduled minimum debt repayments
Remainder of 2012	1,300,000
2013	1,500,000
2014	1,500,000
2015	1,400,000
2016	230,600,000
2017	300,000
Convertible Notes 3.25%, net of discount, due June 2016
Debt
Interest rate (as a percent)	3.25%
Non-Current portion of debt outstanding	192,793,000	190,877,000
Bank loans 2.69% - 3.88% due February 2012 - September 2017
Debt
Current portion of debt outstanding	1,383,000	1,516,000
Non-Current portion of debt outstanding	$ 5,124,000	$ 5,668,000
Bank loans 2.69% - 3.88% due February 2012 - September 2017 | Minimum
Debt
Interest rate (as a percent)	2.69%
Bank loans 2.69% - 3.88% due February 2012 - September 2017 | Maximum
Debt
Interest rate (as a percent)	3.88%

XML

Supplemental Cash Flow Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		46 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Mar. 31, 2012
Non-cash financing activities and investing activities:
Conversion of short-term borrowings from member plus accrued interest, into common shares			$ 6,831
Change in accrued capital expenditures	$ 55,226	$ 14,896	$ 172,858

XML

Related-Party Transactions

3 Months Ended

Mar. 31, 2012

Related-Party Transactions

Related-Party Transactions

(20) Related-Party Transactions

        The Company made principal payments of $0.9 million and $3.1 million for the three month period ended March 31, 2012 and for the year ended December 31, 2011, respectively, under the inventory financing arrangement with Traxys North America LLC ("Traxys and affiliates"), the parent of one of the Company's stockholders, TNA Moly Group, LLC. The outstanding amounts payable to Traxys and affiliates under this arrangement were zero and $0.9 million reported on the condensed consolidated balance sheet at March 31, 2012 and December 31, 2011, respectively, under Short-term borrowing—related party, and zero and $2.8 million in Trade Accounts Payable related to the sales made, but not remitted to Traxys and affiliates at March 31, 2012 and December 31, 2011, respectively.

        The Company and Traxys and affiliates also jointly market and sell certain lanthanum oxide, cerium oxide, misch metal and erbium oxide products. Per the terms of this other arrangement, the Company and Traxys and affiliates split gross margin equally once all costs associated with the sale are recovered by both parties. The Company had an outstanding related payable to Traxys and affiliates in the amount of $65,000 and $169,000 at March 31, 2012 and December 31, 2011, respectively.

        During 2011, the Company made purchases of lanthanum oxide from Traxys and affiliates in the amount of $6.2 million, and purchases of yttrium and bastnasite material of approximately $0.7 million.

        At March 31, 2012 and December 31, 2011, Molycorp Silmet had a balance receivable from Traxys and affiliates of $0.4 million and $2.1 million, respectively, related to sales of tantalum metal to Traxys and affiliates of $3.2 million in 2011.

XML

Acquisitions (Tables)

3 Months Ended

Mar. 31, 2012

Acquisitions

Summarizes the purchase prices and opening balance sheets for the acquisitions

Effective acquisition date for financial reporting purposes:	Molycorp Silmet April 1, 2011			MMA April 15, 2011
Purchase consideration:
Cash consideration	$	9,021		$	17,500
Fair value of common stock		72,653			—
Total purchase consideration	$	81,674		$	17,500
The fair values of the assets and liabilities acquired:
Cash	$	105		$	6,395
Accounts receivable and other current assets		8,626			5,474
Inventory		37,404			11,327
Property and equipment, net		63,393			4,512
Intangible assets subject to amortization		2,669			—
Goodwill		1,455			1,977
Liabilities		(19,974	)		(8,989	)
Deferred tax liabilities		—			(3,196	)
Long-term debt		(3,184	)		—
Noncontrolling interest		(8,820	)		—
Total purchase consideration	$	81,674		$	17,500

Summary of actual and pro forma information

(In thousands, except per share amounts)	Revenue		Net Income (loss)		Net Income (loss) Attributable To Molycorp		EPS Basic
Unaudited pro forma January 1, 2011 to March 31, 2011 (combined entity)	$	59,734	$	4,916	$	4,623	$	0.04

XML

Debt

3 Months Ended

Mar. 31, 2012

Debt

Debt

(13) Debt

        The following tables provide a summary of the current and non-current portions of the debt outstanding at March 31, 2012 and December 31, 2011 (in thousands):

	March 31, 2012
	Current		Non-Current
Convertible Notes 3.25%, net of discount, due June 2016	$	—	$	192,793
Bank loans 2.69% - 3.88% due September 2012 - September 2017		1,383		5,124
Total debt	$	1,383	$	197,917

	December 31, 2011
	Current		Non-Current
Convertible Notes 3.25%, net of discount, due June 2016	$	—	$	190,877
Bank loans 2.69% - 3.88% due February 2012 - September 2017		1,516		5,668
Total debt	$	1,516	$	196,545

        Scheduled minimum debt repayments are $1.3 million for the remainder of 2012, $1.5 million in 2013, $1.5 million in 2014, $1.4 million in 2015, $230.6 million in 2016, $0.3 million in 2017 and zero thereafter.