Molycorp Announces Completion of Capital Raise for Its $781 Million Rare Earth Expansion and Modernization Project

Molycorp, Inc. (NYSE: MCP), the Western hemisphere's only producer of
rare earth oxides, today announced that it has secured the final funds
necessary for the capital build out of its estimated $781 million
expansion and modernization project at its flagship rare earth facility
at Mountain Pass, California with the completion of an offering of $230
million aggregate principal amount of 3.25% Convertible Senior Notes due
2016. Full funding of the capital plan of Project Phoenix is a major
milestone in Molycorp's overall rare earth 'mine-to-magnets' business
plan.

When Phase 1 of Project Phoenix is completed, which is expected to occur
next year, Molycorp's manufacturing assets will comprise the world's
first fully integrated rare earth manufacturing supply chain, producing
high-purity rare earth oxides, metals, alloys, and neodymium-iron-boron
(NdFeB) permanent magnets, widely used in transportation, high tech,
clean energy, defense, and other industries.

'Project Phoenix is now fully funded, and we remain on time and on
budget for both Phase 1 and Phase 2 of this estimated $781 million
expansion and modernization project,' said Mark A. Smith, President and
Chief Executive Officer of Molycorp, Inc. 'Beginning next year, we
expect to significantly ramp up production of 10 different high-purity
rare earth oxides ? light and heavy rare earths ? as well as a variety
of rare earth metals, alloys, and permanent rare earth magnets. We also
remain on track to emerge as the world's lowest-cost manufacturer of
rare earth oxides, which will be a particularly powerful growth driver
for our downstream manufacturing operations.'

'Our high-grade resource, our proprietary low-cost materials processing
technology, and our ability to capture high margins through vertical
integration puts Molycorp in a strong position to capitalize on growth
in global rare earth demand and increasingly tight markets for these
critical materials,' Smith said. 'In addition, recent acquisitions have
enabled us to manufacture rare earth metals and neodymium-iron-boron and
samarium-cobalt alloys, which has moved us closer to realizing our full
'mine-to-magnets' business plan.'

'We expect that more forward integration opportunities will arise from
time to time, and the company intends to be fully capitalized to take
advantage of any such opportunities,' Smith added.

Final capital funding of Project Phoenix was achieved through the
successful closing on June 15, 2011, of an offering of $230 million
aggregate principal amount of Molycorp′s 3.25% Convertible Senior Notes
due 2016 (the 'Notes?) in an offering exempt from the registration
requirements of the Securities Act of 1933, which includes an additional
$30 million aggregate principal amount of Notes sold pursuant to the
initial purchasers′ option to purchase additional Notes. The Convertible
Senior Notes are Molycorp′s senior unsecured obligations and will bear
interest at a rate of 3.25% per annum, payable semi-annually in arrears
on June 15 and December 15 of each year, commencing on December 15,
2011. The Notes will be convertible at any time into shares of
Molycorp′s common stock, cash, or a combination thereof, at Molycorp′s
election. The conversion rate will initially be 14.0056 shares of
Molycorp common stock per $1,000 principal amount of notes (equivalent
to an initial conversion price of approximately $71.40 per share of
Molycorp′s common stock), subject to customary adjustments. The Notes
will mature on June 15, 2016, unless earlier repurchased or converted in
accordance with their terms prior to that date. Molycorp will not have
the right to redeem the Notes prior to maturity.

The estimated capital expenditures for Project Phoenix do not include
annual corporate, selling, general and administrative expenses, as well
as the Company′s working capital requirements, which the Company expects
to fund from cash from operations and/or other sources of capital.

Molycorp also announced the closing of a secondary public offering of
11,500,000 shares of Molycorp′s common stock at a price per share of
$51.00 by certain selling stockholders, which includes an additional
1,500,000 shares of common stock sold pursuant to the underwriters′
option to purchase additional shares.

About Molycorp

Colorado-based Molycorp, Inc. is the only REO producer in the Western
Hemisphere and currently produces more than 3,000 metric tons of
commercial rare earth materials per year. In addition to its flagship
rare earth mine and processing facility at Mountain Pass, California,
Molycorp also owns a controlling interest in the Estonia-based Molycorp
Silmet AS, which has a production capacity of 3,000 metric tons of rare
earth products and 700 metric tons of rare metal products annually and
is one of the largest rare metal and rare earth metal producers in
Europe. Additionally, Molycorp owns and operates Arizona-based Molycorp
Metals and Alloys, one of the leading producers of high-purity rare
earth alloys and metals outside of China. Following the execution of
Molycorp's 'mine-to-magnets' strategy and the expected 2012 completion
of Phase 1 of its modernization and expansion efforts at its Mountain
Pass, California processing facility, the Company expects to produce at
a rate of approximately 19,050 metric tons of REO equivalent per year
from Mountain Pass. The Company expects to achieve an annual production
capacity at Mountain Pass by the end of 2013 of approximately 40,000
metric tons of REO equivalent per year after the completion of Phase 2.
Molycorp intends to provide to the market a range of rare earth
products, including high-purity oxides, metals, alloys, and permanent
magnets. The Company currently sells products to customers in Europe,
North and South America, Asia, Russia, and other previous nations of the
Soviet Union.

Safe Harbor Statement Regarding Forward-Looking 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 secure sufficient capital to implement
its business plans; Molycorp′s ability to complete its Phase 1
modernization and expansion efforts and Phase 2 expansion efforts and
reach full planned production rates for REOs and other planned
downstream products; the final costs of the Phase 1 modernization and
expansion plan and Phase 2 expansion, which may differ from estimated
costs; uncertainties associated with Molycorp′s reserve estimates and
non-reserve deposit information; uncertainties regarding global supply
and demand for rare earths materials; Molycorp′s ability to successfully
integrate recently acquired businesses; Molycorp′s ability to reach
definitive agreements for a joint venture to manufacture
neodymium-iron-boron permanent rare earth magnets and its supply and
financing arrangement with Sumitomo; Molycorp′s ability to maintain
appropriate relations with unions and employees; Molycorp′s ability to
successfully implement its 'mine-to-magnets? strategy; environmental
laws, regulations and permits affecting Molycorp′s 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 Molycorp; and uncertainties associated with unanticipated
geological conditions related to mining.

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,
2010 filed with the SEC. Any forward-looking statement contained in this
press release or the Annual Report on Form 10-K reflects Molycorp′s
current views with respect to future events and 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.

Molycorp Inc.

Jim Sims, 1 303-843-8067

Director of
Communications

Jim.Sims@Molycorp.com

or

Investor
Relations

ICR, LLC

Gary T. Dvorchak, CFA, 1 310-954-1123

Senior
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Gary.Dvorchak@icrinc.com