Inventory

3 Months Ended

Mar. 31, 2012

Inventory

Inventory

(4) Inventory

        At March 31, 2012 and December 31, 2011, inventory consisted of the following (in thousands):

	March 31, 2012		December 31, 2011
Current:
Concentrate stockpiles	$	1,832	$	3,704
Raw materials		33,540		44,770
Work in process		14,099		16,602
Finished goods		58,991		45,045
Materials and supplies		2,025		1,822
Total current	$	110,487	$	111,943
Long-term:
Concentrate stockpiles	$	1,867	$	1,144
Raw materials		8,328		3,186
Finished goods		5		32
Total long-term	$	10,200	$	4,362

Assessment of normal production levels

        For the three months ended March 31, 2012 and 2011, and cumulatively for the period from June 12, 2008 (Inception) through March 31, 2012, Molycorp determined that $3.0 million, $2.6 million and $20.8 million, respectively, of production costs would have been allocated to additional production, assuming Molycorp had been operating at normal production ranges. As a result, these costs were excluded from inventory and instead expensed during the applicable periods. The assessment of normal production levels is judgmental and is unique to each quarter.

Write-downs of inventory

        For the three months ended March 31, 2012 and 2011, and cumulatively for the period from June 12, 2008 (Inception) through March 31, 2012, the Company recognized write-downs of $6.6 million, $0.6 million and $30.4 million, respectively, as a result of production or purchase costs in excess of net realizable value. In addition, the Company recognized write-downs of work-in-process and stockpile inventory totaling zero, $1.3 million and $5.0 million for the three months ended March 31, 2012 and 2011, and cumulatively for the period from June 12, 2008 (Inception) through March 31, 2012, respectively, based on adjustments to estimated REOs quantities.