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MCP (Rare earth miner)
Old 05-10-2014, 11:47 AM   #1
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MCP (Rare earth miner)

I recently took a small position in MCP at $3.25 thinking to capture a bounce. There was no bounce and with the stock at $3.03 I am thinking of just exiting the trade for a small loss (I have gains elsewhere, no biggie).

Talking it over with my wife, she became quite enraged not at the stock pick but at the situation with rare earth elements (REE). MCP was formed as a response to China cutting back exports of REE. They purchased a shut down mine at Mountain Pass, California and proceeded to invest a lot of money and equipment to do environmentally friendly mining of REE. There have been problems with ramping up production which came at the same time REE prices plummeted. The WTO has ruled that China cannot limit the supply of REE even though China claims it wants to limit them for environmental reasons (it is pretty ghastly how China currently mines REE).

I now think MCP will go bankrupt or at least be forced into major dilution. There does not seem to be any desire by the world to have a source of REE outside of China. MCP needs a zero interest loan to allow them to weather the current low REE prices while they work the kinks out of their waste water recycling mining method. I find it a little funny that we give Tesla carbon credits for making electric vehicles but there is no help for a mining company which wants to produce elements essential to making those electric vehicles and produce them in a environmentally friendly fashion.

So it is with some regret and anger that I think I will sell my little 1000 share lot of MCP next week at around $3 (hopefully) and then sit back and watch as China continues to dominate the REE market and force manufacturers to build technology inside China if they want access to these REE.

Sad, but it has been an eye opener in how the world works.
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Old 05-10-2014, 01:00 PM   #2
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I considered MCP as a small speculative investment but chose not to invest.
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Old 05-10-2014, 02:21 PM   #3
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China will do whatever it thinks is in their strategic interests; Just as USA will do whatever is in its interests-even to make war in Iraq. REE are only REE at the current pricing. MCP will recover when pricing becomes better, which ironically makes China happy too
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Old 05-10-2014, 09:51 PM   #4
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Long ago, I would buy the story. Now I try to buy the balance sheet. (When I am not buying index funds.)

It is funny: There just was an ad on this site for Rare Earth Stocks. It was there again a second ago.
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Old 05-12-2014, 12:01 AM   #5
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I only see toilet and washlet bidets because I was looking for one a month ago and mention them on various forums. Apparently the ads are google/doubleclick linked.
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Old 05-12-2014, 08:09 AM   #6
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I bought MCP years ago and got out while the getting was good. (Dad is a retired metallurgical engineer and ran across it in his research.)

The BBC is doing a series of broadcasts on "The Elements" and their piece on the rare earth metals was particularly good. You can download it as a podcast.
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Old 05-12-2014, 11:16 AM   #7
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I got out this morning at $3.16. I hate taking a loss even when it is a small one but I have plenty of gains (thank you Gilead!) in that account. I am just disappointed that they can't seem to mine at a profit while protecting the environment. It doesn't bode well for the future.
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Old 05-12-2014, 12:35 PM   #8
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I agree- part of the BBC podcast mentioned what a mess they were making in China when they got these elements out of the ground, and how badly it's affected the agriculture and the health of the locals. Did you know that Euro notes include a rare earth element that gives them a starry appearance under fluorescent light? They used Europium, of course!
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Old 05-12-2014, 01:38 PM   #9
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Quote:
Originally Posted by Fermion View Post
I got out this morning at $3.16. I hate taking a loss even when it is a small one but I have plenty of gains (thank you Gilead!) in that account. I am just disappointed that they can't seem to mine at a profit while protecting the environment. It doesn't bode well for the future.
I was playing MCP and REE a few years ago, be glad it's just a small loss.
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Old 05-12-2014, 01:41 PM   #10
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Originally Posted by athena53 View Post
I agree- part of the BBC podcast mentioned what a mess they were making in China when they got these elements out of the ground, and how badly it's affected the agriculture and the health of the locals. Did you know that Euro notes include a rare earth element that gives them a starry appearance under fluorescent light? They used Europium, of course!
That is what I realized after I dug deeper into MCP. They will never be able to compete with a country who just tosses the miners at the pit without any protection gear. MCP has to follow rules in the USA to protect the environment and deal with waste water...China just dumps it in the nearest river. Even worse MCP is in California with some of the toughest environmental laws.

I don't know how we can push for green energy (windmills, electric cars) while this type of mining that supports those green products is going on.
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