• Bankruptcy Date: Filed for Chapter 11 bankruptcy on June 25, 2015.
• Details:
• Molycorp was the only U.S. producer of rare earth elements at the time, operating the Mountain Pass mine in California (now owned by MP Materials).
• The company filed for bankruptcy due to a $1.7 billion debt load, plummeting rare earth prices after China eased export restrictions, and a global economic slowdown. Its market value dropped from $6 billion in 2011 to $114 million by 2015.
• Molycorp reached agreements with creditors in January 2016 to sell its assets or reorganize, with Oaktree Capital Management taking control if bids fell short. The Mountain Pass mine was auctioned, and MP Materials later acquired it in 2017.
• Relevance to MP:
• Molycorp’s bankruptcy is directly tied to MP Materials, as MP acquired the Mountain Pass mine post-bankruptcy. Molycorp’s collapse highlighted the risks of high debt and reliance on volatile rare earth prices, which likely influenced MP’s stock volatility (e.g., 2022 and 2023 drops) during periods of market or price weakness.
• The 2015 bankruptcy occurred before MP’s IPO in November 2020, so it didn’t directly cause MP stock drops but set a precedent for industry challenges.
from Grok 3:
Molycorp Inc. (United States)
• Bankruptcy Date: Filed for Chapter 11 bankruptcy on June 25, 2015.
• Details:
• Molycorp was the only U.S. producer of rare earth elements at the time, operating the Mountain Pass mine in California (now owned by MP Materials).
• The company filed for bankruptcy due to a $1.7 billion debt load, plummeting rare earth prices after China eased export restrictions, and a global economic slowdown. Its market value dropped from $6 billion in 2011 to $114 million by 2015.
• Molycorp reached agreements with creditors in January 2016 to sell its assets or reorganize, with Oaktree Capital Management taking control if bids fell short. The Mountain Pass mine was auctioned, and MP Materials later acquired it in 2017.
• Relevance to MP:
• Molycorp’s bankruptcy is directly tied to MP Materials, as MP acquired the Mountain Pass mine post-bankruptcy. Molycorp’s collapse highlighted the risks of high debt and reliance on volatile rare earth prices, which likely influenced MP’s stock volatility (e.g., 2022 and 2023 drops) during periods of market or price weakness.
• The 2015 bankruptcy occurred before MP’s IPO in November 2020, so it didn’t directly cause MP stock drops but set a precedent for industry challenges.