Molycorp Announces Filing of Claim in Colorado Federal District Court

  Molycorp Announces Filing of Claim in Colorado Federal District Court

Business Wire

GREENWOOD VILLAGE, Colo. -- November 05, 2012

Molycorp, Inc.'s (NYSE: MCP) (“Molycorp” or the “Company”) Executive VP and
General Counsel, John F. Ashburn, Jr., today announced that the Company has
filed a claim against M&K Chemical Engineering Consultants, Inc. (“M&K”) and
certain current and former officers and owners of M&K in Colorado Federal
District Court arising from a commercial dispute over defects in engineering
services related to the Company’s Project Phoenix modernization and expansion
of its Mountain Pass, California, facility.

While the Company generally does not comment on active disputes, Mr. Ashburn
indicated that, due to the high level of public interest in the Project, he
wanted to ensure that the reasons underlying the dispute were clear.

Mr. Ashburn said that the claim was filed in an attempt to recover a portion
of the costs incurred by the Company in rectifying defective engineering
services for which the Company believes the defendants are responsible and
that the effects of the defective engineering underlying the claim have
already been largely mitigated by the Company’s Technology Group and other
engineering companies working on the Project. Those defects will not impact
the timing of the Company’s plans to ramp up production at its Mountain Pass
facility, Mr. Ashburn said, and the Company still expects to achieve full
Phase 1 production rates by the end of the current quarter as previously
announced.

Mr. Ashburn noted that, while unfortunate, the claim filed by Molycorp
essentially amounts to nothing more than a commercial dispute over monetary
damages.

About Molycorp, Inc.

Molycorp is a leading rare earths and rare metals company, and combines a
world-class rare earth resource at Mountain Pass, California, with advanced,
high-purity rare earth and rare metal materials processing capabilities. With
26 locations across 11 countries, Molycorp is vertically integrated across the
global rare earth mine-to-magnetics supply chain. It produces rare earth
magnetic materials as well as a variety of high-purity, custom engineered
products from 13 different rare earths (lights and heavies) as well as five
rare metals (gallium, indium, rhenium, tantalum and niobium), and the
transition metals yttrium and zirconium. Through its Molycorp Magnequench
subsidiary, the Company is a leading global producer of neodymium-iron-boron
(NdFeB) magnet powders, used to manufacture bonded NdFeB permanent rare earth
magnets. Through its joint venture with Daido Steel and Mitsubishi
Corporation, Molycorp expects to begin manufacturing next-generation, sintered
NdFeB permanent rare earth magnets in early 2013. For more information please
visit www.molycorp.com.

Safe Harbor Statements

This release contains forward-looking statements that represent Molycorp's
beliefs, projections and predictions about future events or Molycorp's future
performance. Forward-looking statements can be identified 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
Molycorp's 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. Factors that may cause actual
results to differ materially from expected results described in
forward-looking statements include, but are not limited to: Molycorp's ability
to complete its planned capital projects, such as its initial modernization
and expansion efforts, including the achievement of an annual production
capacity of 19,050 metric tons at its Mountain Pass, California rare earth
mine and processing facility, or the Molycorp Mountain Pass facility, which
management refers to as Project Phoenix Phase 1, and the second phase capacity
expansion plan, which management refers to as Project Phoenix Phase 2, and
reach full planned production rates for REO and other planned downstream
products, in each case within the projected time frame; and the outcome of
disputes with contractors regarding defective engineering services. For more
information regarding these and other risks and uncertainties that Molycorp
may face, see the section entitled “Risk Factors” of the Company's Annual
Report on Form 10-K for the year ended December 31, 2011 and of the Company's
Quarterly Reports on Form 10-Q. Any forward-looking statement contained in
this release or the Annual Report on Form 10-K or the Quarterly Reports on
Form 10-Q reflects Molycorp's current views with respect to future events and
is subject to these and other risks, uncertainties and assumptions relating to
Molycorp's 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. Molycorp assumes 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.

Contact:

Molycorp, Inc.
Jim Sims, +1 303-843-8062
Vice President, Corporate Communications
Jim.Sims@Molycorp.com
or
Brian Blackman, +1 303-843-8067
Senior Manager, Investor Relations
Brian.Blackman@molycorp.com