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On a day when exuberance — either rational or irrational, who knows? — is ruling equity prices, rare earths miner Molycorp Inc. (NYSE: MCP) is surging. The company, which has had its troubles in 2012, has been tagged by Bloomberg as possible takeover target.

Since its IPO in July of 2010, the company has seen its share price top $75 and tumble below $6 a share. Prices for the company’s rare earth metals have been in a slump for more than a year, costs have escalated at its California mine, and its original CEO was asked to leave the company.

Bloomberg notes that big users of rare earth minerals like Nissan Motor Co. or Siemens AG (NYSE: SI) could be interested, as well as private equity firms.

China, which currently supplies well over 90% of the world’s demand for rare earths has not shipped its self-imposed quota totals in each of the past two years. Molycorp’s chief competitor, Australia’s Lynas, has run into regulatory difficulties with its Malaysian plant, but Molycorp has had its own problems incorporating the processing plants it acquired last summer following its $1.1 billion acquisition of Canada’s Neo Material.

The company’s book value has dropped below one, which makes it a particularly attractive takeover target. The issue is whether or not the global economy will pick up enough to push up demand for the company’s minerals. With Chinese miners, Lynas, and other North American companies either producing the minerals or preparing to produce them even as demand is soft, not every rare earth miner is likely to survive. And acquirers who might adopt a buy and hold attitude toward Molycorp are pretty scarce.

Shares of Molycorp are up 9% at $10.29 this morning, in a 52-week range of $5.75 to $35.79. Shares were up nearly 20% earlier this morning.

Paul Ausick