Rare earths producer Molycorp Inc(NYSE:MCP) is being investigated by the Securities and Exchange Commission for issues related to transparency and disclosures, the company revealed in a regulatory filing recently.
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Molycorp said that it was co-operating with investigation authorities and as not able to give a timeline for the length of the investigations or the depth of the probe.
The company, which mines, processes and sells rare earths, reported a third-quarter loss but came in above analyst expectations.
Rare earth companies like Molycorp were once favourites in the mining sector, especially from the point of view of the stock markets as top producer China clamped down on exports sending rare earth metal and oxide prices skyrocketing.
Prices of rare earths minerals have dropped since then and this has had an impact on the profitability of companies in this sector and on their share prices too.
Rare earths are a small but essential ingredient in high-tech items like smartphones, tablet computers and hybrid cars.
Molycorp is one of just a handful of rare earth producers outside of China. The company has nearly completed a major expansion at its Mountain Pass mine in California.
Shares of the company have fallen about 30% since the news.