Molycorp Inc. (MCP), the owner of the largest rare-earth deposit outside of China, said it’s being investigated by the U.S. Securities and Exchange Commission over the accuracy of the company’s public disclosures.
The SEC notified the company in August that it’s probing the disclosures “among other things,” Greenwood Village, Colorado-based Molycorp said today in a filing. Molycorp is cooperating with the SEC and can’t predict how long the investigation will take, it said in the filing.
Molycorp has tumbled 67 percent this year after a slump in prices for rare earths, a group of 17 chemically similar elements used in wind turbines and hybrid cars. Users have sought alternative raw materials and used stockpiles after a surge in prices in 2010 through 2011 that was spurred by a curb in supplies from China, the world’s biggest producer.
The company, which sold shares in a July 2010 initial public offering, is increasing output at its Mountain Pass mine in California. It also sells magnetic raw materials and other rare-earth products from plants it acquired with its June takeover of Canada’s Neo Material Technologies Inc. for C$1.3 billion ($1.3 billion).
Molycorp dropped 14 percent, the most in three months, to $7.50 at the close in New York.
The shares sold for $14 apiece in the 2010 IPO and more than tripled that year after China curbed output and cut export quotas to conserve resources and protect the environment. The stock rose as high as $77.54 in May 2011.
Lanthanum oxide, a rare earth used to refine gasoline, dropped 56 percent in the past year, according to Shanghai Steelhome Information data. Cerium oxide, used in glass polishing, has declined 61 percent and neodymium oxide, used in magnets, has fallen 63 percent, the data show.
Customers are starting to return to the market, Molycorp Chief Executive Officer Mark Smith said yesterday in an interview.
Jim Sims, a company spokesman, didn’t immediately respond to an e-mail and voice message today seeking further comment.
To contact the reporter on this story: Sonja Elmquist in New York at firstname.lastname@example.org
To contact the editor responsible for this story: Simon Casey at email@example.com