Molycorp Declares Preferred Dividends

Molycorp, Inc. (NYSE: MCP), the Western hemisphere's only producer of
rare earth oxides, today announced that its Board of Directors has
elected to declare a cash dividend on outstanding shares of its 5.50%
Series A mandatory convertible preferred stock in an amount equal to
$1.604 per share. Molycorp will pay the dividend on June 1, 2011 to the
holders of record of shares of Series A mandatory convertible preferred
stock at the close of business on May 15, 2011. As of May 4, 2011, there
were a total of 2,070,000 shares of Series A mandatory convertible
preferred stock outstanding.

The Board elected to fund the dividend from available cash, in lieu of
shares of the Company's common stock, after considering the near-term
and long-term outlook for the Company, and with the objective of
minimizing dilution to the Company's common stockholders. Molycorp
expects the supply and demand imbalance within the rare earths industry,
which has driven dramatic increases in the prices of rare earth
products, to continue for the foreseeable future.

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. 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 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 Soviet Union countries.

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
continuation of high rare earth prices; the ability of the Company to
pay dividends in cash on its mandatory convertible preferred stock; the
Company′s ability to secure sufficient capital to implement its business
plans; 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 December 31, 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, Inc.:

Jim Sims

Director of Public Affairs

1
(303) 843-8067

Jim.Sims@Molycorp.com

or

Investor
Relations:

ICR, LLC

Gary T. Dvorchak, CFA

Senior Vice
President

1 (310) 954-1123

Gary.Dvorchak@icrinc.com