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Molycorp's (MCP) deal to distribute its cerium-based water treatment product to municipal and...

Molycorp's (MCP) deal to distribute its cerium-based water treatment product to municipal and industrial wastewater treatment plants may have eased some investor concerns about MCP's cerium capacity, Goldman Sachs says (also). Jefferies starts coverage at Neutral but could turn more positive if customer trials on the product end well and upon a better understanding of the deal's margin profile.
Comments (2)
  • Jack Lifton
    , contributor
    Comments (407) | Send Message
     
    I wonder if anyone at Goldman-Sachs has ever marketed wastewater treatment. I was once the technical sales manager of a small company that produced, among other products, wastewater treatment Chemicals. Municipal and industrial wastewater treatment chemicals are only sourced from approved and qualified vendors. Such approvals can take a very long time especially for large systems. The idea that every customer will just roll over and accept a new vendor with a new technology is literally a pipe-dream. If SorbX is cheaper and better then it will find a market, but NOT IF IT'S ONLY SOURCED FROM ONE VENDOR! It will take time and a licensing program for any new technology to gain a foothold against the existing vendors. I'm not criticizing Molycorp for promoting a technology that may be an improvement. I am criticizing the absolutely uniformed people at Goldman-Sachs who have decided that he world glut of cerium won't affect Molycorp, because they have a purported new use for cerium. This is beyond silly. New products and new technologies no matter how good they are mostly fail in the marketplace, because the vendor or inventor cannot wait and cannot endure the trials necessary for product acceptance in the marketplace.
    16 Mar 2013, 12:08 AM Reply Like
  • jbde
    , contributor
    Comments (665) | Send Message
     
    Wrong - extensive approvals and single sourcing are not issues.

     

    I have had extensive involvement in municipal water treatment, not only of fresh water sources, but also of waste water processing and return [sewage treatment].

     

    The 'old' ways are just that - a new cheaper technology in a cash strapped municipal world will win adoption at a rapid pace despite whatever acceptance trials are necessary.

     

    As there is no potential contamination by SorbX, there is no risk except that it does not perform as advertised. If it does, then it wins and will be utilized as long as it remains cost effective. And that means total cost - procurement, handling, application, removal, etc.

     

    Many facilities are strapped because of non-compliance issues and cannot expand due to ineffective systems and processes in place. Facility expansion with new systems and processes can thus 'test' Sorbx side-by-side although such a premise is more political than scientific. But it provides a path to justify expansion of facilites that otherwise cannot do so.

     

    While I cannot quantify the financial benefits to MCP, it appears to be a positive as a viable use for the huge quantities of cerium mined at Mtn Pass.

     

    Now that commercialization of SorbX is underway - TWT.
    19 Mar 2013, 07:55 AM Reply Like
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