Ensuring an American Rare Earth Value Chain:Molycorp’s Fully Integrated, Mine-To-Magnets

Manufacturing Supply ChainApril 2011 Update

Forward-Looking Statementsand Other Important Cautions

This presentation 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  modernization and expansion efforts and reach full planned production rates for rare earth oxides and other planned downstream products; 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 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” in Molycorp Quarterly Report on Form 10‐Q for the quarterly period ended December 31, 2010 filed with the SEC. Any forward‐looking statement contained in this presentation, or the Quarterly Report on Form 10‐Q , 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.

This presentation also contains statistical data and estimates obtained by Molycorp from industry publications and reports generated by third parties. Although Molycorp believes that the publications and reports are reliable, it has not independently verified such data.

THIS PRESENTATION USES THE TERM “RESOURCES” TO DESCRIBE THOSE QUANTITIES OF REE’S THAT ARE POTENTIALLY RECOVERABLE FROM ACCUMULATIONS YET TO BE DISCOVERED. BECAUSE OF THE UNCERTAINTY OF COMMERCIALITY AND LACK OF SUFFICIENT EXPLORATION DRILLING, THE RESOURCES CANNOT BE CLASSIFIED AS RESERVES. INVESTORS ARE ADVISED THAT THE SEC DOES NOT RECOGNIZE RESOURCES. ONLY PROBABLE AND POSSIBLE RESERVES MAY BE DISCLOSED TO INVESTORS IN AN SEC FILING. RESOURCES HAVE A GREAT AMOUNT OF UNCERTAINTY AS TO THEIR EXISTENCE. THERE IS NO CERTAINTY THAT ANY PORTION OF THE RESOURCES WILL BE DISCOVERED AND, IF DISCOVERED, WHETHER THEY COULD BE DEVELOPED ECONOMICALLY. THEREFORE, INVESTORS ARE CAUTIONED NOT TO ASSUME THAT ALL OR ANY PART OF MOLYCORP’S RESOURCES EXIST, OR THAT THEY CAN BE DEVELOPED ECONOMICALLY. ACCORDINGLY, INFORMATION CONCERNING DESCRIPTIONS OF RESOURCES CONTAINED IN THIS PRESENTATION IS NOT COMPARABLE TO INFORMATIONINCLUDED IN SEC FILINGS.

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Lanthanum

Cerium

Praseodymium

Neodymium

Samarium

Dysprosium

Europium

Terbium

Gadolinium

Yttrium

Reduces- Weight- Emissions- Energy

consumption

Allows- Greater efficiency- Performance- Miniaturization- Speed- Durability- Thermal stability

Molycorp intends to produce all 10 of these rare earth elements commercially

Rare Earths: Key to Advanced Technologies, Properties That Are Driving Demand

Product applicationsPropertiesSignificant REEs

3

Global Demand Growth Continuesto Justify Diversity of Supply

Global Rare Earths Supply and Demand (mt, REO ±20%)1

Source: IMCOA (January 2011)1 Does not reflect Molycorp’s potential to increase production to 40,000 mt of REO per year following completion of Phase 2 expansion plan, but instead reflects anticipated production of 19,050 mt of REO per year beginning in 2013

0

50,000

100,000

150,000

200,000

250,000

2005 2006 2007 2008 2009 2010 2011F 2012F 2013F 2014F 2015F

China Supply Molycorp Supply - Phase 1 Other Supply China Demand Adjusted Global Demand

4

Chinese Exports Constraints Require a Western World Supply Response

Source: IMCOA1 Based on actual announced quotas through the first half of 2011 and IMCOA forecasts (35% reduction compared with the first half of 2010); Please refer to page 9 of the Form S-1 Registration Statement for information regarding Chinese quotas2 ROW quota deficit shows the supply deficit that would occur should no REE production outside of China comes online

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

2005 2006 2007 2008 2009 2010 2011F 2012F 2013F 2014F 2015F

Chinese Export Quota ROW Demand

Global Rare Earths Forecasted Deficit1

Additional demand drivers Government stockpiling Further adoption of wind turbine technology Potential for China to become a net RE importer

Global Surplus Forecast ROW Quota Deficit2

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Demand Growth: Next GenerationWind Turbines Use Rare Earths in Tons

Global commitment to increasing the presence of wind energy: U.S. EIA estimates >3x increase in installed wind

generation 2010-30 to 490GW China is estimated to have allocated >$150bn to become

the world’s wind leader Growing European use of offshore wind generation

Permanent rare earth magnets are used in generators of wind turbines Increased reliability and efficiency – reduces expensive

breakdowns and maintenance expenditures Critical element for 3MW+ and off-shore turbine segments

With the expected JV, Molycorp would have access to the raw materials, IP and technical expertise to be a world-class supplier of permanent magnets

Wind turbine demand drivers

Permanent rare earth magnet in generator

Each 3MW permanent magnet turbine requires approximately one metric ton of neodymium iron boron magnets1

61

159

249319

397

490

0

100

200

300

400

500

600

2006 2010F 2015F 2020F 2025F 2030F

North America Europe Asia Other

26.346.0

8.0

26.3

54.0

2010f 2015f

Magnets Consumption Wind Turbine Impact

Source: IMCOANote: Both magnet consumption and wind turbine impact are middle of IMCOA range

Wind turbine production (GW) REO consumption for magnets (ktpa)

Source: Energy Information Administration1 IMCOA estimates each megawatt requires 0.4 tons of NdFeB magnets

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Hybrid and Electric Vehicles Demand Drivers:

Annual Hybrid and Electric Vehicle Sales (000’s)

Demand Growth: Rare Earths Critical For Hybrid and Electric Vehicles

Total Rare Earth Metal Alloys Consumption (ktpa)

22.3

52.0

2010f 2015fSource: IMCOA

9621,270

1,7752,247

2,5592,974

3,206

2010f 2011f 2012f 2013f 2014f 2015f 2016f

Hybrid Vehicles Electric Vehicles

Intensive use of rare earths in hybrid and electric vehicles are compounding the traditional use of rare earths

Hybrid and electric vehicles contain 9-11 kgs of rare earths

Anticipated rare earth demand from hybrid and electric vehicles is estimated to grow significantly

Source: JD Power and Associates

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ObservationsOn China

1H 2011 Chinese export quotas continue 7-year downward trend; senior officials warn of declining quotas in the future.

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1

2

3

4

5

• coordinated pricing sought• environmental reforms• vertical industry consolidation being

forced.

59% of respondents think China will become a net importer of rare earths by 2015” in a Metal-Pages.com poll. Senior Chinese officials not ruling out this possibility.

Internal REE demand rising with GDP growth while Chinese production from 2005-2010 relatively stagnant

Multiple government initiatives will affect production and price levels: • hundreds of illegal mines closed• export licenses reduced• export taxes increased• VAT rebate on exports withdrawn

Implementation of strict environmental standards expected to “double production costs” (Wang Guozhen, the former VP of China Nonferrous Engineering and Research Institute)

Source: Metal-Pages.com

Market Dynamics Support Pricing

China continues to focus supply inward, despite growing ROW demand

Dramatic consolidation of Chinese rare earths industry

Existing rare earths production insufficient to meet expected market demand

National strategic stockpiling China, Japan, and S. Korea

currently stockpiling US and EU looking to

stockpile

Pricing ($/Kg) Pricing drivers

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$0.00/kg

$20.00/kg

$40.00/kg

$60.00/kg

$80.00/kg

$100.00/kg

$120.00/kg

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

200720082009 2010 2011

Weighted Avg. Oxide Price

Complex Industry with Steep Barriers to Entry

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RE projects are more complex chemical processing than mining Mining is a small, relatively straight‐forward part of process

Industry Based on Custom Products

Not commodities – REs made to individual customer specifications RE business model based on sales contracts directly to customers Require that producers have a plant producing high quality material 

for use in the commercial market Without it, nearly impossible to get any form of financing

High CapitalIntensity

Molycorp project US$781MM; Lynas project capital cost US$533MM More than half of Molycorp’s total project cost is processing

Permitting and Environment

Must manage presence of uranium/thorium in ore Well‐known science but adds to cost Requires active, transparent dialogue with stakeholders

Economics of Ore Grade

Low ore grade magnifies the costs and minimizes the amount of usable end product making it uneconomical to process

Deposits with low ore grade unlikely to be economically viable

ProjectComplexity

World-Class Rare Earth Resourceat Mountain Pass, CA

58 years of operating history

Mine permit and EIR allow operations through 2040

Mining operations re-started in Dec. 2010

Construction of new processing facility underway

Plan provides for fully installed infrastructure

Water

Electricity

Natural gas pipeline

Easy access to Interstates, rail head, and California seaports

Facility is ISO 9000 and ISO 14000 certified

Estimated 30+ years mine life based on Phase 1 production plan (15+ years with Phase 2 expansion assuming no increase in recovery rates or additional exploration drilling)

198 Employees

Reserves & Resources

Source: SRK report dated April 2010Note: See disclaimer for information on reserves and resources

Category REO% k tons REO (Mlbs)

SEC Guide 7: Proven and Probable 8.24 13,588 2,210

NI 43-101: Measured & Indicated 6.68 24,341 3,251

NI 43-101: Inferred 6.32 10,446 1,320

NI 43-101 Totals 34,787 4,571

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The Roots of Molycorp’s Innovations

• Unocal and Chevron didn’t see how Mountain Pass could compete with the Chinese

• Unwilling to make the large capital investments needed upgrade Mountain Pass’s facilities

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Out of Operating permits

Low cost Chinese material

EnvironmentalIssues from

Late 90s

Challenges that Molycorp faced in 2000s:

The Roots of Molycorp’s Innovations

These objectives required that Molycorp develop and implement several new and innovative technologies at Mountain Pass.

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Be the Low Cost Producer

Create High Value use for

Cerium

Produce REs in Environmentally

Superior Manner

In 2004, Molycorp established a pathway to success in the rare earth marketplace by focusing on 3 core objectives:

INNOVATION

On‐Site Co‐Gen with Natural Gas

Near‐Zero Wastewater Discharge

EnvironmentalTechnology Breakthroughs

Large Reduction of Reagent Use

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Higher RE Recovery and Process Efficiency Breakthroughs

New Cerium‐based water filtration tech

IMPACT

Same amount of usable material from half the amount of ore

Eliminated need for wastewater ponds; recreate our own reagents

Reduced power costs, improved reliability, reduced GHG emissions

Major reduction in key variable cost

Key new market, spreads costs more effectively across portfolio of materials

1 Based on SRK production costs as of April 28, 20102 IMCOA3 Wang Guozhen, the former VP of China Nonferrous Engineering and Research Institute, indicated that China’s production costs may double as a result of

ongoing environmental reforms. Base cost numbers were not quantified. (Metal-Pages.com, Jan. 7, 2011)4 Current figure based on Lynas presentation as of 12/7/2010

China

Anticipated Cost Advantages vs. Key Competitors

4

Current Average Rare Earth Oxide Production Cost (per kg)

2,3

Cost-advantaged processing drives significant commercial advantage:

High-power quality and efficient onsite natural gas co-generation

On-site reagent production and acid recycling

Process technology break-throughs

Infrastructure

$2.77

$5.58

$7.00

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00

Competitors face increasing costs:

Chinese focus on reducing environmental degradation has increased cost structure

In December 2010, Lynas revised their estimated costs for the Mt. Weld project

Molycorp maintains its cost structure as the lowest in the world and may benefit from synergies in the Phase 2 expansion process

1

15

$5.64(3/2010)

BreakthroughTechnologies

Water Treatment

• Lack of Clean drinking water is a global problem

• XSORBX® unique chemistry removes:

•Pathogens such as Protozoa, Fungi, Bacterial, Viruses

•Organic toxins such as Pesticides

•Heavy metals such as Arsenic, Selenium, and Chromium

• We’re developing man-portable filters togive our troops thecleanest drinking water available

Industrial Process Waste Streams

• XSORBX® ASP, Arsenic Sequestration Process employs the XSORBX®

technology in the mining and smelting industry

• Volumetric capacity for specific hazardous materials that exceeds any other commercially available product

• Studies show stable, concentrated waste could potentially be classified as non hazardous

Molycorp Deploys Incredibly Flexible Technology Focused on:

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Molycorp has Achieved Multiple Milestones Since IPO in July 2010

Fully permitted for construction (including Phase 2 expansion)

Recommenced mining operations

Started construction of Phase 1 project ahead of schedule

Commenced sales of XSORBX in 3Q 2010Access to IP to execute “mine-to-magnets” strategy Non-binding LOI with Hitachi Metals for magnets and alloys

Acquired AS Silmet, European producer of RE oxides and metals

Non-binding MOU with Sumitomo Corporation Expected to supply cerium and lanthanum-based products

at market-based prices2011 Production sold out (>4000 tons REO)Definitive agreement with W.R. Grace Supply of primarily lanthanum-oxide

Operational

Vertical Integration

Supply Agreements

Financing

17

$130mm debt and equity investment in Molycorp through the Sumitomo non-binding MOUAdvanced to due diligence phase for DOE loan guarantee program ($280MM)Raised ~$200MM in mandatory convertible preferred stock offering

Near-Term Plans to Double Production Capacity

3,000

19,050

40,000

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

Total REO Production Capacity(REO equivalent in metric tons / year)

Phase 1 Completion

Phase 2Completion

Expected production breakdown by REO

Lanthanum oxide28%Other

1%

NdPr 16%

Cerium non-metal

50%

Other Lanthanum

products (High purity

oxides and metals)

5%

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Current

3,000-5,000

Acquisitions, Proposed JVs Provide Technology, Experience Enabling

Mine-to-Magnets Supply Chain Strategy

Rare Earths Material

Processing

Global Supply Chain:

~97% Chinese Production

~100% Chinese Production

80% Chinese

20% Japanese(1)

80% Chinese

17% Japanese(1)

3% Europe(1)

Source: REITA report dated January 27, 20101 Dependent on Chinese rare earths feedstock2 Non-binding letter of intent

Molycorp Business Supply Chain

Rare Earths Mining and

Milling

~97% Chinese Production

Rare Earth Magnets

Rare Earth Metals

22

19

Others Others

22

Rare Earth Alloys

Continue construction of Mountain Pass modernization (Phase 1)

Finish capital raising efforts so that Phase 1 and Phase 2 are fully funded

Complete engineering around Phase 2 expansion for up to 40,000 mt

Convert 50% or more of the Phase 1 LOI product volume into final contracts

Be mechanically complete on Phase 1 by July 2012

Have 100% of Phase 1 planned production volume contracted

Start production and be running at full planned Phase 1 production rates by year-end 2012

Be mechanically complete on Phase 2 expansion by mid 2013

Start full run-rate Phase 2 production by late 2013

Sell production from Phase 2 based on customer demand

2011

2012

2013

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Key Project Milestones

Questions?