Molycorp Announces Major Rare Earth Supply Agreement with Hitachi Metals

Molycorp, Inc. (NYSE: MCP), the Western hemisphere's only producer of
rare earth oxides (REO) and the largest REO producer outside of China,
announced that it has reached an agreement with Hitachi Metals to supply
the company with rare earth magnetic materials, including Didymium (a
mix of neodymium and praseodymium) metal and alloy, as well as Lanthanum
Oxide.

The three-year deal, which extends and expands upon an existing supply
relationship between the companies, significantly increases the amount
of rare earth materials that Molycorp will provide Hitachi Metals. The
volume begins at a level comparable to the companies′ current agreement
and grows substantially when Molycorp reaches its Phase 1 production
level in 2012 at its flagship rare earth production facility at Mountain
Pass, California.

'We are very pleased to be moving forward with this significant supply
agreement to produce high-quality rare earth products for Hitachi
Metals,' said Mark A. Smith, President and CEO of Molycorp. 'Hitachi
Metals has a long standing reputation as a global leader in the
development and manufacture of advanced technology products that require
rare earth materials, and we look forward to playing a very prominent
role in their production supply chain.?

Building upon its 'mine to magnets? vertical integration strategy,
Molycorp′s newly announced supply relationship with Hitachi Metals
demonstrates the progress the company has made in developing its
downstream manufacturing capabilities over the past year. The oxide and
metal production at the Molycorp Silmet facility in Estonia and the
alloy production at the Molycorp Metals and Alloys facility in Tolleson,
Arizona, will enable the company to produce the upgraded magnetic
materials necessary to meet a significant portion of Hitachi Metals′
global requirements when Molycorp reaches its full, Phase 1 production
levels at Mountain Pass.

'The strategic acquisitions we have made this year and the technology
innovations we are building into our Mountain Pass facility position us
to produce some of the world's most advanced magnetic materials,? Smith
said. 'We are proud that our rapidly growing manufacturing supply chain
will be able to meet the exacting specifications of a renowned global
technology company like Hitachi Metals.?

Separately, Molycorp and Hitachi Metals announced that they are
suspending discussions for now on their December 2010 letter of intent
to create a joint venture in the U.S. to manufacture
neodymium-iron-boron (NdFeB) alloy and permanent magnets made from the
alloy. The companies were unable to reach agreement on certain key
matters affecting the value of the joint venture to each party.

'We remain fully committed to producing rare earth permanent magnets and
to capturing the highest value of our rare earth materials throughout
the supply chain,? said Smith. 'In fact, we have been in advanced
discussions with other companies regarding magnet joint venture
opportunities for some time, and we look forward to sharing more details
on these developments in the near future.?

About Molycorp

Colorado-based Molycorp, Inc. is the only rare earth oxide (REO)
producer in the Western Hemisphere and the largest REO producer outside
of China. The company currently is expected to produce a total of
between 4,541 to 5,813 metric tons of commercial rare earth materials in
2011 from its three facilities. 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. One
of the largest rare earth and rare metal producers in Europe, Molycorp
Silmet AS has an annual production capacity of approximately 3,000
metric tons of rare earth products and 700 metric tons of rare metal
products. Molycorp also owns Molycorp Metals and Alloys in Tolleson,
Arizona. Formerly known as Santoku America, Inc., the facility is one of
the leading producers of high-purity rare earth alloys and metals
outside of China, and manufactures neodymium-iron-boron (NdFeB) alloy
and samarium cobalt (SmCo) alloy, as well as other specialty alloys and
products. 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 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.

Safe Harbor Statement Regarding Forward-Looking Statements

This release contains forward-looking statements that represent
Molycorp′s beliefs, projections and predictions about future events or
Molycorp′s future performance. Forward-looking statements can be
identified 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
Molycorp′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: Molycorp′s ability to secure sufficient capital to implement
its business plans; Molycorp′s ability to complete its Phase 1
modernization and expansion efforts and Phase 2 expansion efforts and
reach full planned production rates for REOs and other planned
downstream products; the final costs of the Phase 1 modernization and
expansion plan and Phase 2 expansion, which may differ from estimated
costs; uncertainties associated with Molycorp′s reserve estimates and
non-reserve deposit information; uncertainties regarding global supply
and demand for rare earths materials; Molycorp′s ability to successfully
integrate recently acquired businesses; Molycorp′s ability to reach
definitive agreements for a joint venture to manufacture
neodymium-iron-boron permanent rare earth magnets and its supply and
financing arrangement with Sumitomo; Molycorp′s ability to maintain
appropriate relations with unions and employees; Molycorp′s ability to
successfully implement its 'mine-to-magnets? strategy; environmental
laws, regulations and permits affecting Molycorp′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 Molycorp; and uncertainties associated with unanticipated
geological conditions related to mining.

For more information regarding these and other risks and uncertainties
that Molycorp may face, see the section entitled 'Risk Factors? of the
Company′s Annual Report on Form 10-K for the year ended December 31,
2010 filed with the SEC. Any forward-looking statement contained in this
press release or the Annual Report on Form 10-K reflects Molycorp′s
current views with respect to future events and Molycorp 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.

Brian Blackman, 1 303-843-806

Senior Manager,
Investor Relations

Brian.Blackman@Molycorp.com

or

ICR,
LLC

Investor Relations:

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

Senior
Vice President

Gary.Dvorchak@icrinc.com