Property, Plant and Equipment, net

12 Months Ended

Dec. 31, 2012

Property, Plant and Equipment [Abstract]

The Company capitalized $902.3 million and $416.7 million for the years ended December 31, 2012 and 2011, respectively, the majority of which related to the expansion and modernization of the Molycorp Mountain Pass facility. These amounts include capitalized interest of $59.3 million and $7.5 million, respectively. Depreciation expense for the years ended December 31, 2012, 2011 and 2010, was $20.9 million, $14.0 million and $6.0 million, respectively. Accumulated amortization on the capital lease was $0.9 million in 2012.

At December 31, 2012 and 2011, property, plant and equipment consisted of the following (in thousands):



	December 31,
	2012			2011
Land	$	12,475		$	11,059
Land improvements (15 years)	63,269			15,748
Buildings and improvements (4 to 40 years)	237,379			23,677
Plant and equipment (2 to 15 years)	194,934			68,441
Vehicles (7 years)	2,842			1,235
Computer software (5 years)	9,528			3,002
Furniture and fixtures (5 years)	1,116			464
Construction in progress (a)	1,011,541			436,547
Capital Lease (10 years)	15,658			—
Mineral properties (Note 8)	24,327			24,692
Exploration rights (Note 8)	16,166			—
Property, plant and equipment at cost	1,589,235			584,865
Less accumulated depreciation	(44,931		)	(23,237		)
Property, plant and equipment, net	$	1,544,304		$	561,628


(a)	Represents costs incurred at the Molycorp Mountain Pass facility and all other capital projects. See Note 3.

In 2012 and 2010, the Company recognized impairment expenses, net of depreciation, of $5.9 million and $3.1 million, respectively. Of the total 2012 impairment charge, $3.8 million related to the mill silos and conveyor belt at the Molycorp Mountain Pass facility not functioning as intended, and $2.0 million related to equipment no longer in use at the Molycorp Silmet facility. The impairment in 2010 related to management decision to replace rather than refurbish the old mill and crusher at the Molycorp Mountain Pass facility. There were no impairment of long-lived tangible assets in 2011.

Subject to certain exceptions, substantially all of the property and assets of the Company are pledged as collateral for some of the Company's indebtedness, as further discussed in Note 14 below.

- Definition

The entire disclosure for long-lived, physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, accounting policies and methodology, roll forwards, depreciation, depletion and amortization expense, including composite depreciation, accumulated depreciation, depletion and amortization expense, useful lives and method used, income statement disclosures, assets held for sale and public utility disclosures.

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