GREENWOOD VILLAGE, Colo., Nov 28, 2011

Molycorp, Inc. (NYSE: MCP) (Molycorp), Daido Steel Co., Ltd. (Daido), and Mitsubishi Corporation (Mitsubishi) today announced the formation of a joint venture to manufacture and sell next-generation neodymium-iron-boron (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 capital contribution ratio of the newly formed company will be 30.0% by Molycorp, 35.5% by Daido, and 34.5% by Mitsubishi. The joint venture will be financed by the three shareholders and by a government subsidy sponsored by Japan's Ministry of Economy, Trade, and Industry (METI).

The joint venture 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 companies expect to begin work on the new facility next month and eventually expand operations in the U.S. and elsewhere.

The technology to be used by the joint venture is a new and novel approach that does not depend on the use of patents held by other magnet companies. The 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.

Made with the rare earths neodymium, praseodymium and dysprosium (or terbium), NdFeB magnets are the world's most powerful permanent magnets and are key components in many advanced technologies, including high-performance motors used in the power trains of electric vehicles, hybrid vehicles and wind power generators, as well as in motors in home appliance and industrial applications. Electric motors are estimated to use approximately 45 percent of global power consumption, according to the International Energy Agency. Using NdFeB magnets in motors can help reduce electric power consumption by 20 percent and would contribute to reducing global CO₂ emissions by an estimated 1.2 billion tons.

Target markets for the joint venture 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. The joint venture has been provisionally awarded a supply agreement for a next-generation electric vehicle with a major automotive manufacturer.

The new company will engage in the manufacturing and sale of next-generation NdFeB magnets and will take full advantage of Daido's commercial-scale magnet manufacturing technologies, Mitsubishi's domestic and international marketing and sales network, and Molycorp's rare earth oxide, metal, and alloy manufacturing resources and capabilities.

According to the independent market analysts at Roskill, China currently supplies approximately 94 percent of world's demand for rare earths. Export restrictions and other controls by China have made procurement of stable supplies difficult, which underscores the importance of Molycorp's ability to provide the joint venture with stable supplies of rare earth materials for magnet manufacturing.

"I am happy and very honored that Molycorp is able to partner with these extraordinary companies, who are global leaders and innovators in so many areas," said Mark A. Smith, President and CEO of Molycorp. "Molycorp also is pleased that the joint venture can break ground almost immediately and will be able to produce some of world's most powerful rare earth magnets in as little as 14 months."

Smith added: "The next-generation magnet manufacturing technologies being utilized by the joint venture are a perfect complement to the advanced technologies Molycorp is deploying across our own rare earth manufacturing supply chain. This initiative is a major milestone in Molycorp's mine-to-magnets strategy and continues our strong focus on technology innovation, efficiency, and operational excellence."

About Molycorp, Inc.

With offices in the U.S., Europe, and Japan, Molycorp, Inc. is the largest rare earth oxide (REO) producer outside of China. In addition to its current production of rare earth oxides at its flagship rare earth mine and processing facility at Mountain Pass, California, the Company produces rare earth metals, rare earth alloys (such as neodymium-iron-boron and samarium-cobalt alloys) and rare metals such as niobium and tantalum. The rare earths and rare metals Molycorp produces are critical inputs in 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; advanced water treatment technology for use in industrial, military and outdoor recreation applications; and other technologies. For more information please visit www.molycorp.com.