Molycorp has obtained board approval for its phase II expansion plan of the Mountain Pass facility in California, US.
The expansion is expected to double the production capacity of the facility.
Post-expansion, the facility will have the ability to produce up to 40,000t of rare earth oxide a year by 2013.
The capital cost of the expansion is estimated at $250m.
Molycorp plans to use the net proceeds from its proposed mandatory convertible preferred stock offering to fund phases I and II.