press release

Molycorp looks for major cost cuts in face of slumping molybdenum price

Questa, N.M., Oct. 22, 1998 - Molycorp, Inc., today told employees that it is evaluating options to significantly reduce costs at its Questa, N.M., molybdenum mine in the face of severely lower prices for molybdenum.

"Molybdenum prices are 45 percent below the level earlier this year," said Gene Dewey, president of Molycorp. "We will be evaluating options over the next two months to determine appropriate production plans for 1999."

Dewey said that the operating plans for 1999 could require significant reductions in employee workforce.

At Questa, Molycorp has been producing at the rate of about 12 million pounds of molybdenum per year. The operations currently employs approximately 350 people. The mine is expected to continue to operate through the end of year at the present level of production.

The underground Questa mine was reopened in 1996, following an earlier suspension of activities due to low molybdenum prices.

Last month, Molycorp announced that it planned to suspend operations at its mine and mill at Mountain Pass, Calif., at the end of the year. Molycorp said it will continue to market bastnasite, cerium and lanthanum concentrates from inventory while it is evaluating alternatives to resume operations at its Mountain Pass facility.

Molycorp is a wholly-owned subsidiary of Unocal Corporation.

Updated: October 1998