NEW YORK — Rare earths miner Molycorp Minerals LLC has filed a lawsuit against M&K Chemical Engineering Consultants Inc. for allegedly violating contractual obligations to help expand Molycorp’s flagship mine.

M&K Chemical Engineering is one of 15 chemical engineering contractors helping Molycorp develop a new facility, dubbed "Project Phoenix," that will produce nine additional rare earths at the Mountain Pass, Calif., mine by late 2012.

Granite City, Ill.-based M&K allegedly broke its contract with Molycorp by failing to build according to California state law, providing incomplete specifications, designing non-functioning plans and drafting unsafe designs, according to the lawsuit.

"Many of M&K’s designs were unsafe, creating hazardous conditions that, if not rectified, could have resulted in serious injury or death to personnel," according to the complaint.

Project Phoenix will produce heavy rare earth concentrates, including dysprosium, terbium and europium, and process them to be used in hybrid electric vehicles, wind turbines and electronics (amm.com, Aug. 28). The facility will be the only one of its kind in the Western Hemisphere, the Greenwood Village, Colo.-based company said.

The suit, filed Oct. 31 in the U.S. District Court of Colorado, alleges that M&K designed incomplete, incorrect and flawed structures and failed to deliver billed-for designs. Molycorp paid more than $37 million for M&K’s services and is claiming damages of more than $45 million.

Despite the purported setbacks, Project Phoenix is still on schedule to begin production at year-end.

M&K declined to comment on the case.