Shares of rare earth metals producer Molycorp are dropping after the company priced shares of its initial public offering below expectations, raising $393.8 million.

The Greenwood Village, Colo., company cut the price for shares of its IPO to $14 from an expected range of $15 to $17 per share.

Shares are down $1.12, or 8 percent, to $12.88 in morning trading on the New York Stock Exchange.

Molycorp Inc. is the only producer of rare earth oxides in the Western hemisphere. It owns the Mountain Pass mine, the largest deposit outside of China, which dominates the field.

The metals are used in the clean energy sector, high-tech devices and defense applications.

But Molycorp does not plan to start mining operations until later this year.