Investments

3 Months Ended

Mar. 31, 2012

Investments

Investments

(9) Investments

Boulder Wind Power, Inc.

        On September 13, 2011, the Company invested $20.0 million into Boulder Wind Power, Inc. Series B convertible preferred stock, which is accounted for at cost. At March 31, 2012, the fair value of this investment was not estimated as there were no identified events or changes in circumstances that may have had a significant adverse effect on the fair value of the investment.

Intermetallics Japan Joint Venture

        On November 28, 2011, Molycorp, Daido Steel Co., Ltd. ("Daido") and Mitsubishi Corporation ("Mitsubishi") entered into a preliminary shareholders agreement for the purpose of establishing a new private company, Intermetallics Japan ("IMJ"), to manufacture sintered neodymium-iron-boron ("NdFeB") permanent rare earth magnets. The capital contribution ratio of the newly formed company is 30.0% by Molycorp, 35.5% by Daido and 34.5% by Mitsubishi. According to the definitive shareholders agreement, which was signed in January 2012, Molycorp will contribute, upon achievement of certain milestones and subject to the approval of Molycorp's Board of Directors, Japanese Yen (JPY) 2.5 billion in cash (or approximately $30.4 million based on the JPY/ U.S. dollar exchange rate at March 31, 2012), in exchange for ordinary shares of IMJ over a period of twelve months. The actual remittance amounts will vary depending on the future exchange rate between the U.S. dollar and the Japanese Yen, and the achievement of certain milestones by the joint venture.

        On January 11, 2012, the Company made its first contribution of $3.8 million to IMJ. The Company accounts for this investment under the equity method because it has the ability to exercise significant influence over the operating and financial policies of IMJ, as evidenced by Molycorp's ownership share and its proportional voting rights and representation in the Board of Directors of IMJ. The condensed consolidated statement of operations and comprehensive income for the three months ended March 31, 2012 includes a loss of $0.2 million from the Company's proportional ownership in IMJ.