Molycorp Announces Approval of Phase 2 Expansion at Mountain Pass, a Proposed Mandatory Convertible Preferred Offering by the Company and Proposed Secondary Offering of Common Stock

Molycorp, Inc. (NYSE: MCP), the Western hemisphere's only producer of
rare earth oxides, today announced that its Board of Directors has
approved a Phase 2 expansion plan that is expected to double the
production capacity of its Mountain Pass facility in California. In
addition, the Company has filed a registration statement on Form S-1
with the U.S. Securities and Exchange Commission (SEC) in connection
with a proposed mandatory convertible preferred stock offering by the
Company as well as an offering of common stock by certain stockholders.

In light of strong industry fundamentals, including reduced Chinese
supply and the strong pricing environment, Molycorp's Board of Directors
approved a Phase 2 expansion plan that is expected to give Molycorp the
ability to produce at an annual rate of up to approximately 40,000
metric tons of rare earth oxide (REO) equivalent per year at its
Mountain Pass facility by the end of 2013. This expansion represents an
approximate doubling of the original Phase 1 production capacity at an
estimated capital cost of approximately $250 million, in addition to the
costs for the Phase 1 plan. The Company believes that it will realize
substantial savings by committing to this expansion now while
construction activities are underway for its Phase 1 initial
modernization and expansion plan.

While Molycorp's production capacity is expected to reach 40,000 metric
tons of REO equivalent per year with the Phase 2 expansion, the Company
will sell its products into the market at a rate commensurate with
customer and/or demand growth.

Molycorp expects to use the net proceeds from the proposed mandatory
convertible preferred stock offering to fund its Phase 1 and Phase 2
plans.

The proposed secondary offering will help facilitate the liquidity
objectives of the selling stockholders via an orderly underwritten
offering and will provide additional public float with respect to the
Company's common stock. The principal selling stockholders are
affiliates of Resource Capital Funds, Pegasus Capital Advisors, L.P.,
and The Traxys Group, which are the three main investors that led the
purchase of the Mountain Pass Rare Earth Facility in 2008. These selling
stockholders will remain substantial investors in Molycorp immediately
after the offering.

'Without the foresight and long-term, strategic commitment of Resource
Capital Funds, Pegasus Capital Advisors, and The Traxys Group, Molycorp
would not be in the position we are today,' said Mark Smith, a member of
Molycorp's Board of Directors and the Company's Chief Executive Officer.
'Their willingness to take on significant, early stage risk has
positioned Molycorp, and all of our stakeholders, to continue to benefit
from the very positive fundamentals of the rare earth sector.'

J.P. Morgan Securities LLC and Morgan Stanley & Co. Incorporated will
act as joint book-running managers for the proposed offerings. Each of
the offerings will be made only by means of a prospectus. When
available, copies of the preliminary prospectus relating to each of the
offerings may be obtained from J.P. Morgan Securities LLC; c/o
Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New
York 11717; or from Morgan Stanley & Co. Incorporated, Attention:
Prospectus Department, 180 Varick Street, New York, NY 10014
(1-866-718-1649, email address: prospectus@morganstanley.com).

A registration statement relating to these securities has been filed
with the SEC but has not yet become effective. These securities may not
be sold nor may offers to buy be accepted prior to the time the
registration statement becomes effective. This press release shall not
constitute a solicitation of an offer to buy, nor shall there be any
sale of these securities in any state in which such offer, solicitation
or sale would be unlawful prior to the registration or qualification
under the securities laws of any such state.

About Molycorp

Colorado-based Molycorp, Inc. is the only REO producer in the Western
Hemisphere and currently produces approximately 3,000 metric tons of
commercial rare earth materials per year. 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, Molycorp expects to produce at a
rate of approximately 19,050 metric tons of REO equivalent per year,
which is expected to increase to approximately 40,000 metric tons of REO
equivalent per year when Phase 2 is completed. The Company intends to
provide to the market a range of rare earth products, including
high-purity oxides, metals, alloys, and permanent magnets.

__________________________

This press release contains forward-looking statements that represent
the Company's beliefs, projections and predictions about future events
or its future performance. You can identify forward-looking statements
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 the Company'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: the
Company's ability to secure sufficient capital to implement its business
plans, including, without limitation, the proposed offering of mandatory
convertible preferred stock; the Company's ability to complete its Phase
1 modernization and expansion efforts and Phase 2 expansion efforts and
reach planned production rates for REOs and other planned downstream
products; uncertainties associated with the Company's reserve estimates
and non-reserve deposit information; uncertainties regarding global
supply and demand for rare earth materials; the Company's ability to
maintain appropriate relations with unions and employees; the Company's
ability to successfully implement its 'mine-to-magnets' strategy;
environmental laws, regulations and permits affecting the Company'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 the Company; uncertainties associated with
unanticipated geological conditions related to mining; and other risks
discussed in the Company's filings with the U.S. Securities and Exchange
Commission, including the Company's Quarterly Report on Form 10-Q for
the period ended September 30, 2010, which filings are available from
the SEC.

Any forward-looking statement you read in this press release reflects
the Company's current views with respect to future events and is subject
to these and other risks, uncertainties and assumptions relating to the
Company's operations, operating results, growth strategy and liquidity.
You should not place undue reliance on these forward-looking statements
because such statements speak only as to the date when made. The Company
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 has filed a registration statement (including a prospectus)
with the SEC for the offerings to which this communication relates.
Before you invest, you should read the prospectus in that registration
statement and other documents Molycorp has filed with the SEC for more
complete information about Molycorp and these offerings. You may obtain
these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov.
Alternatively, the issuer, any underwriter or any dealer participating
in the offering will arrange to send you the prospectus for each
offering if you request it by calling J.P. Morgan Securities LLC at
1-866-803-9204 or Morgan Stanley & Co. Incorporated at 1-866-718-1649.

Investor Relations:

ICR, LLC

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

Senior Vice President

Gary.Dvorchak@icrinc.com

or

Molycorp,
Inc.

Jim Sims, +1 303-843-8067

Director of Public Affairs

Jim.Sims@Molycorp.com